Short quote: editing
From wiki, an explanation for Original and Revised Versions of the Bad Tuesday Chapter:
The original 1933 printing of Mary Poppins contained a version of the chapter Bad Tuesday in which Mary and the children use a compass to visit places all over the world in a remarkably short period of time. Because it contained a variety of cultural and racial stereotypes of Chinese, Inuit, Africans, and Native Americans, Travers responded to criticism by revising the chapter in 1981 to include animal representatives instead of people. At the same time, original illustrator Mary Shepard altered the accompanying drawing of the compass to show a Polar Bear at the north, a Macaw at the south, a Panda at the east, and a Dolphin at the west.
From the WeeWeb profile:
In 1981, Travers revised the "Bad Tuesday" chapter of MP, in which Mary Poppins took the children to the four points of a magic compass, where they met stereotype Eskimos, Blacks, Chinese, and American Indians. The Eskimo, Chinese, and Indian stereotypes don't give much offense - they give some, because the presentation of groups as quaintly exotic tends to turn them into toys, but the objection is slight compared to the stereotyping which presents Blacks as apparently stupid, unable to master the language they speak. ("You bring dem chillun dere into ma li'l house for a slice of water-melon right now.")
It's to Travers' credit that although she didn't see why the affectionately-intended stereotypes should give offense, she realized that those who said the stereotypes were offensive were dealing with an important issue. She revised the chapter so that the compass points are represented by a Polar Bear, a Macaw (south), a Panda (east), and a Dolphin (west).
Mary Shepard, the original illustrator, changed the illustration of the compass points accordingly.
Checking Google Books, can only see the revised edition. Upon further Googlebooking, The Death of the Grown-up discusses this. A couple of key pages are missing.
Now all I need to do is find a pre-1981 copy to see how bad it was.