From Wikipedia:

Native Hawaiians (in Hawaiian, kānaka ʻōiwi, kānaka maoli or Hawaiʻi maoli) refers to the indigenous Polynesian people of the Hawaiian Islands or their descendants. Native Hawaiians trace their ancestry back to the original Polynesian settlers of Hawaii.

According to the U.S. Census Bureau report for 2000, there are 401,162 people who identified themselves as being “native Hawaiian” alone or in any combination. 140,652 people identified themselves as being “native Hawaiian” alone. The majority of native Hawaiians reside in the State of Hawaiʻi, California, Nevada and Washington. Two-thirds live in the State of Hawaiʻi while the other one-third is scattered among other states with a high concentration in California.

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So, the term Hawaiians refers to those that travel their ancestry back to the original Polynesian settlers of the islands. However, there are a lot of people that do not belong to this group, that also consider themselves Hawaiian, or locals. Locals are those that were born in Hawaii, but may not have any ancestral ties with the original Hawaiians whatsoever. Japanese, Caucasians, African-Americans, can all be called locals, if they were born on and grew up on one of the islands.

Some people, having not been born in the islands, or grown up there – are still considered “local” when adopted by the locals. People that spend a lot of time there or that work to help locals – are sometimes considered locals.

That is as far as my understanding of it goes. If you’d like to write in with what you consider Hawaiians and locals, feel free. I’d like to post some other views on the subject on this page.

Hawaiian Culture and Heritage

Hawaiian Language

Official Site – Office of Hawaiian Affairs

Council for Native Hawaiian Advancement