You can use Google books to discover how “Mongoloid” was used in a medical context during the early part of the twentieth century.
Stuff such as
The general muscular relaxation present in mongoloid cretin and amaurotic family idiocy may give rise to suspicion of paralysis and indeed this sometimes occurs and as will be noted hereinafter microcephalus and other cerebral defects are often associated with paralysis of the spastic type The second or spastic group is well illustrated by the cerebral palsies. Rigidity of the extremity involved exaggeration of the deep reflexes no reaction or degeneration and no atrophy are symptoms common to all types and are distinctly opposite to the symptoms of the flaccid type. In general spasticity means cerebral lesion or lesion of lateral or posterior tracts of cord. Flaccidity means anterior cord disease or peripheral nerve lesions.
[source][1]
Thus, “mongoloid” did have a more specific meaning than is commonly appreciated. It may have been specific enough to mean “person with Down’s Syndrome”. Down’s syndrome is associated with characteristic facial features, and it is one of those facial features-- slanted eyes-- which were seen as sufficiently similar to the epicanthic fold common among central asian populations to be called “mongoloid”
So it could be seen as a diagnostic criteria, though in that era, treatment may not have consisted of anything more substantive than mere neglect, and the diagnosis merely an excusatory basis for this neglect.
Discrimination against the handicapped may come in the form of “binning.” Because you have these features, you belong in this bin, and because you belong in this bin, you are not going to be treated as a full member of society. What other people call the bin is immaterial. The discrimination, however, is most definitely not.
[1]: New York State Journal of Medicine - Google Books