How Well Do You Know English Slang?
1650s, "having a characteristic taste" (of wines, fruits, etc.), from race (n.2) in its older sense of "flavor" or in the sense "class of wines" + -y (2); meaning "having a quality of vigor" (1660s) led to that of "improper, risqué," first recorded 1901, probably reinforced by phrase racy of the soil "earthy" (1870). Related: Racily; raciness.
Somewhat indecent; raunchy: The movie has a lot of racy dialogue (1901+)