It’s not a community rule, but I was under the impression that it fell under the instance discrimination rules.

Orc is anyone who fights on Russia's side in the Ukraine war and more broadly the people who support the war. It's usually not racist because it A) does not refer to every single person of Russian ethnicity and B) also includes people from other countries who went to fight for Russia voluntarily.

If it is a racist slur depends how it's used.

You are the moderator of your own community, I don't think its fair to expect the instance admins to moderate your community. They should only have to step in if your not doing your job.

As far as this specific slur goes maybe its not on their radar, maybe they don't think the fight is worth it right now, or maybe they just give you the tooling to enforce your own level of uplifting environment.

You can set the tone and expectations for your community however you like.