Even if it is Spanish, do not use the term indio. Because it was employed by Spanish invaders, it sounds a lot like the English n-word to locals. The politically acceptable phrase is el indgena or la indgena — but, like with the n-word, extremely close pals within a circle of friends may get away with it. Another term to avoid is cholo, chola, or cholita, which all imply indigena. This may be used lovingly among indigenous people (it’s a popular nickname for a kid, for example), but it’s insulting when used by an outsider. The n-word is used, but in a humorous/playful manner, so don’t get upset if you hear it on the street.
Even if you have around 20 No Drugs t-shirts at home, understand that people chew coca leaves, particularly in the rural. Consider it a cultural component with social and ceremonial components. Remember that coca leaves are not cocaine and are thus lawful. You may sample them to get a taste of the culture. If you don’t enjoy chewing them, try a mate de hojas de coca instead (also quite effective against altitude sickness). However, the consumption of coca leaf tea may result in a positive drug test in North America over the following several weeks.
Officially, the majority of Peruvians are Roman Catholic, but pre-Hispanic religion is still alive and well, particularly in the rural. Respect this by acting as though you were in a church while visiting temple ruins or other ceremonial sites.