I live in Oklahoma, which is Choctaw for 'Red Man Land', and I have heard this 'What is an Indian?' discussion a few times. (Okla=people, humma=red; this first appeared on Spanish maps in 1541.)
Going by my memory, which I will be the first to claim as faulty, you are an NDN (this is how some Native Americans spell this) if you are 1/16 Native American.
But now you have to prove this and some tribes make this easy and some tribes make it very, very hard. The Cherokees will accept no one into their tribe unless they are on the tribal rolls (The 'Dawes') which were closed in something like 1907. The Delawares used to be more open about accepting members until a treaty from the 1700's turned up that gave their tribal leadership over to the Cherokees. After a lot of court battles the Delawares ceased to exist as a tribe, so you might not want to apply to them.
As a rule of thumb the wealthier a tribe the harder it is to get in. Around here the Choctaws own a number of Casinos and truck stops which provide a lot of income for their tribe. The Osage have been one of the richest tribes in the US since Frank Phillips, of Phillips Petroleum, hit oil on their land. I don't know if any of these tribes are recoginizing new members, but a Cherokee told me they were getting about 50 letters a day from people who claimed to be a member.
For more information on this contact the B. of Indian Affairs. A word of caution, though: If any of your ancestors fought at Little Big Horn it would be best not to mention this. I have heard more than one NDN claim this with cause you heaps of trouble with the Great White Father.
That last sentence may sound like I am trying to make a stupid joke, but according the the Indians I know this is supposed to be the truth.
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