Rangers are reffered to as "huns" because the royal family's bloodline dates back to when the Huns Empire stretched across Europe many years ago into Germany.
The Royal family's (our current royal family) name is believed to date back to Germany, through another Royal family in more recent years. The Hun empire is believed to be related to this bloodline too.
So what does the royal family have to do with Rangers?
Well Rangers are, as you know, a club proud of its British roots, hence the reason there are so many Union flags flown at Ibrox, and indeed there is a picture of Her Majesty in the home teams' dressing room, which as a pre-match ritual, all the players touch before each game.
Because Rangers are essentially a British club through and through, the term "huns" was used by Celtic fans (who have deep Irish roots) to offend Rangers fans by offending their Queen and essentially, their country. which leads back to the whole Irish vs British thing.
It is used as a derogatry term, as "huns" (if you read the link below) are seen as barbarians and this suits Celtic fans nicely. It's certainly something you would not call a Rangers fan and not expect them to be highly offended - this is not another possible explanation, but a poorly constructed excuse to cover up bigotry.
It is as offensive as calling a Celtic fan a "fenian".