The word "Farang" comes from the Thai words for French people "Khon Farangset",
as France was some of the first western countries to do visit and do business with Thailand back in the days.
Since Thai people couldn´t see the difference between different western nationalities, they started to use the word "Farang" for all westerners!
If a Thai doesn´t know what country a western foreigner comes from they will use the word "Farang",
but once they know you and what country you come from they will usually call you by your countryname, in my case "Khon Saweeden" Swedish.
Indians and Arabs are usually refered to as "Khaek" which means guests.