Did you know that the word handicap is derived from the phrase "cap-in-hand"? Not surprisingly, it has fallen by the wayside as a term of reference for people with disabilities. For this, we can thank that strange but powerful phenomenon called "political correctness". Imported to this part of the world from the US in the early 1990s, it created so much debate that it ended up becoming a object of a great deal of ridicule, and a favourite subject for comedians.
Under the PC lexicon, a postman would be changed to post-person, short people or dwarves would be termed "vertically challenged", while the term "bald" might be ditched in favour of "comb-free" etc, etc.
The jokes and ridicule notwithstanding, there's no doubt that the general principles of PC were based on good intentions, particularly with regard to disability.
The National Disability Authority uses a leaflet on "disability etiquette", published by the British-based Employers Forum on Disability, as a general style guide for the kind of language used when talking to or talking about people with disabilities.
Instead of using the word handicapped, connoting, as it does, dependence on charity, the words "a person with a disability" or "disabled person" should be used. "People with disabilities" may not trip off the tongue quite as easily as "disabled people", but some people do prefer this term, because it represents an effort to put the person before the disability.
Similarly, the word "disabled" should not be used as a collective noun - that is, talking about "the disabled", as it implies a homogenous group separate from the rest of society. The term "wheelchair bound" should also be avoided in favour of "wheelchair user" - a wheelchair, after all, represents freedom to its user.
The leaflet advises against using medical labels, or referring to a person in terms of a condition. So, for example, don't refer to a person as "a spastic" or "an epileptic". Instead, say "he/she has cerebral palsy", or refer to a "person with epilepsy". Similarly, the word "invalid" tends to equate disability with illness, and can be construed as "not valid".
Many people dislike the phrase "mental handicap" because it confuses learning difficulties with mental illness. People with intellectual disabilities prefer to be described as, well, "people with learning difficulties".
Finally, the leaflet states, you should not say "disabled toilet". Toilets are either accessible or they're not.