The right to dress like an idiot is a fundamental principle of festival culture, but at this weekend's Bass Coast electronic music festival in British Columbia, Canada, one particular kind of idiot will not be welcome. Last week, the organisers told festival-goers that Native American feathered headdresses, also known as war bonnets, would not be permitted on site. "We understand why people are attracted to war bonnets," they wrote on the festival's Facebook page. "They have a magnificent aesthetic. But their spiritual, cultural and aesthetic significance cannot be separated. Bass Coast festival takes place on indigenous land and we respect the dignity of aboriginal people."

The coverage the festival's policy has received is as revealing as the decision itself. Last summer, another Canadian festival, Tall Trees, imposed a similar ban, but it did not become international news. The Bass Coast prohibition arrives just as the headdress issue is approaching a tipping point. Last month, Pharrell Williams swiftly apologised for agreeing to wear a war bonnet on the cover of Elle magazine, while the long-running campaign to change the name and logo of the Washington Redskins football team scored a major victory when the US Patent and Trademark Office cancelled the team's trademarks for being "disparaging to Native Americans". The latest festival headwear trend finds itself on the frontlines of a much broader battle against "redface" stereotyping.

The backlash is a classic example of online activism. It has not been spearheaded by an official campaign, lobby group or celebrity spokesperson but a growing array of individual voices repeatedly making one simple demand: stop wearing headdresses as fashion accessories. Many of those making this demand, however, are surprised that it even needs to be said in 2014.

"When it first started happening, my reaction was like, really?" says Ehren Thomas, also known as Bear Witness, of the Ottawa-based dance music trio A Tribe Called Red. "I thought we were over this. I thought the politically correct age of the 90s had taught people we weren't allowed to make fun of other cultures but apparently I was wrong."

This summer, headdresses, often accessorised with fluoro warpaint, have been ubiquitous at festivals from Coachella to Latitude. Festival culture has always been drawn to the idea of tribes: consider the neo-pagan aesthetic of Burning Man, the early 90s free-party scene and the hardcore hippie enclaves of Glastonbury. Put people in a field for a weekend, sleeping under canvas (and, in some cases, teepees), possibly on drugs, and some are bound to explore fantasies of escaping modern society and embracing their "natural" selves via the otherness of older cultures. Headdresses slot comfortably into the amorphous array of "tribal" knickknacks that have been keeping festival stall-holders in business for years.

But the case against headdress chic is powerful, and it's threefold. First, the trend ignores the differences between indigenous peoples. There are 564 federally recognised tribes in the US alone, but fashion smushes them into one vague stereotype with all the sophistication of a B-grade 1950s western. "You'll see someone wearing a headdress in the same picture as a totem pole and a canoe when actually those are from three different cultures," says Bear Witness. "The totem poles are from the northwest, headdresses are from the plains and the kind of canoes you usually see are woodland canoes. So it's robbing us of our individual cultures."

Second, it disrespects the sacred significance of the headdress. Among the plains people, they are worn only by male chiefs, and only on special ceremonial occasions. "Headdresses are something that has to be earned," says academic, activist and Cherokee Nation member Adrienne Keene, who chronicles the misuse of indigenous culture on her Native Appropriations blog. "That's completely lost when it's this chicken-feather thing that you bought at a costume shop. That deep sacred meaning is eclipsed by the desire to just dress up and play Indian."

Finally, far from being a trivial issue, the trend reminds indigenous peoples of all the more serious crimes and indignities they have been subjected to over the past 500 years. Even after their land was stolen and vast numbers were killed, the remaining Native Americans were not granted full citizenship until 1924, and their religious rights were not protected until 1978. Tribal chic treats them as other: exotic creatures in their own land.

"When you're in a world that sees you as a mascot with warpaint and feathers, issues of representation become of extreme importance," says Bear Witness. "We dress and live like everyone else. We don't live in teepees, we don't hunt buffalo. All those things that are part of the stereotype are ways of dehumanising us."

Of course, this is not the first time that Native American iconography has been appropriated. Doubtless some people were offended in the early 90s, when Corinne Day photographed a 15-year-old Kate Moss in a headdress and Jamiroquai's Jay Kay wore one on stage. There was certainly a minor fuss after OutKast performed Hey Ya! in headdresses against a sci-fi teepee backdrop at the 2004 Grammy Awards. The difference now is that the trend has filtered down from pop videos and catwalks to festival crowds, and that it is taking place in the full glare of social media. "It's not like it's new that native folks are upset and uncomfortable about it," says Keene. "It's just now we have a platform and our voices can be heard."

The current vogue began around eight years ago. Natasha Khan of Bat for Lashes wore a series of headdresses while promoting her 2006 album Fur and Gold, and actor-turned-singer Juliette Lewis used one to project a warrior-like image in her band Juliette and the Licks. In early 2010, a cluster of incidents, including Ke$ha's American Idol performance, coverage of the Coachella Festival and a window display at a branch of Juicy Couture, spurred Keene to write her oft-quoted blogpost But Why Can't I Wear a Hipster Headdress?

The development also turned A Tribe Called Red from a party band into a more politicised outfit. "The political side of A Tribe Called Red is really just a responsibility that we found ourselves needing to take up quickly," explains Bear Witness. "We want people to come and have a good time, but once we found that people were showing up at our parties in headdresses we had to speak out against it."

Opposition to the trend has led to a long series of embarrassing climbdowns. The Navajo Nation has an ongoing lawsuit against Urban Outfitters over the retailer's 2011 Navajo-branded range of clothing and accessories, including alcohol flasks and the "Navajo hipster panty". It claims that the company violated both the Nation's own trademark on the Navajo name and a federal law that makes it illegal to falsely suggest that a product was produced by Native Americans. Forever 21 quietly renamed its own Navajo-branded range, launched in the same year. In 2012, model Karlie Kloss apologised for wearing a headdress during a Victoria's Secret show, as did the brand, and No Doubt abruptly pulled their video for Looking Hot. The latter was a bewilderingly crass hotchpotch of Native American stereotypes that the band claimed had been made in consultation with "Native American studies experts at the University of California", rather than, as it appeared, the ghost of John Wayne.

Even these high-profile incidents haven't been enough to make the worlds of pop and fashion think twice, judging by Elle and Pharrell's joint snafu and Chanel's "cowboys and Indians"-themed show last November. This year, the Flaming Lips walked into the biggest controversy of their career when frontman Wayne Coyne bullishly defended his friend Christina Fallin, daughter of Oklahoma's governor, after Native Americans objected to her flippant use of a war bonnet in a Facebook photograph. Both Coyne and Fallin apologised, though only after the situation had escalated and led to the acrimonious departure of the band's drummer.

"It's really frustrating to me that we still have to have this conversation because the information is so easily accessible now," says Keene. "If anyone on Pharrell's design team would have googled 'native headdress' it pops up. It's not just me, its everywhere! It's a choice at this point to be ignorant because this is popping up every couple of weeks, to the point where I struggle to find new ways to talk about it."

One theme of these celebrity apologies is that the offending party's intentions were pure and the outrage has come as a great shock. "I am deeply sorry if what I wore during the VS Show offended anyone," tweeted Kloss. "If we wrongly stepped on anybody's sacredness, then we're sorry about that. That was never our intention," said Coyne. "We deeply apologise if it has been misinterpreted or is seen as offensive as it was really meant to be a tribute to the beauty of craftsmanship," said Chanel. These controversies reveal not a conscious denigration of Native Americans but a complete failure to consider the implications of using a ceremonial headdress as a cute prop.

For this reason, Keene has come to question the comparison she made in her 2010 blogpost between "playing Indian" and blackface. "I'm starting to think it's not the most apt comparison," she says. "Folks who don blackface for Halloween realise it's a mocking thing but most of the people wearing headdresses think of it as a homage to native peoples and some misguided attempt at 'respect'. It's a very different approach. It's not that they're doing it maliciously, they're just coming at it in completely the wrong way."

Fifty years ago, Native Americans were routinely demonised in popular culture. Marlon Brando, a passionate supporter of the American Indian Movement, famously dispatched Native American actor Sacheen Littlefeather to the 1973 Academy awards to reject his Best Actor award and read from a statement in which he accused Hollywood of "degrading the Indian and making a mockery of his character". The problem now is more subtly pernicious. Native Americans aren't villainised but romanticised as brave, noble figures from the distant past, and this obscures the problems that communities face today.

"It's representative of how most people think about native peoples – as one monolithic group that doesn't really have a place in modern society," says Keene. "In the vast majority of people's minds we only exist as these mythic creatures, not as living, breathing, contemporary people. So our real issues don't exist in the minds of people either. We need to start deconstructing those images in order for us to be seen as full human beings in the eyes of non-natives."

Keene has been dismayed by the amount of pushback she has received as a campaigner. While high-profile figures are prone to apologise to stem the bad publicity, ordinary festival-goers and sports fans often dig their heels in. Few go as far as the Washington Times leader writer who dared to claim: "Erasing the names of great Indian tribes from sports teams … might eventually destroy their memory. The greater injustice would be done to the Indians themselves." But many use the slippery-slope argument: first they came for the headdresses … Others claim that Native Americans are being over-sensitive about a merely sartorial issue. "People don't want to be wrong," she says. "They don't want to be called racist. I know a lot of the pushback is responding to discomfort and fear."

"Unfortunately, we run into resistance when we try to say: 'Can you please not do that,'" agrees Bear Witness. "People are telling us it's just fun, or get over it. On the festival scene, people are giving us a 'don't ruin our good times' attitude. I would love to say that it's as simple as informing people about what's wrong, but it's also about people being able to accept that information."

So even as protesting voices have grown louder, the trend has become more pronounced. As well as being popular at festivals, headdresses are a sought-after commodity on Etsy. Nonetheless, both Keene and Bear Witness say that they feel the ground is shifting. Universities have begun to caution students against dressing as ethnic caricatures at Halloween parties. The San Francisco Giants baseball team is considering a ban on headdresses after one sparked a tense incident on Native American Heritage Night. Meanwhile, Bass Coast's decision could inspire other festivals to follow suit next summer.

Most encouragingly of all, when Keene and fellow activist Jessica Metcalfe responded angrily to a stereotype-packed 2012 "pow wow" hosted by fashion label Paul Frank, the brand asked the pair to collaborate on an "appropriate and respectful" range using Native American designers. "It showed how this big multinational company could work with native designers and make something appropriate and beautiful," says Keene. "If companies started doing that proactively and letting the public see what real native design looks like, that would be incredible."

"When you see the industry start to change its mind, that gets really exciting," says Bear Witness, who thinks that costly mistakes such as the No Doubt video are also likely to have a deterrent effect. "Financially, it's going to be brutal for producers of this kind of stuff. They made a video that was only out for a few hours."

Campaigners would seem to have both an unanswerable case and considerable momentum, so perhaps by next summer the festival headdress will be taboo. Bear Witness's optimism has its limits, though. "I'm surprised to see [headdress misuse] happen now," he says in a resigned tone, "so I'm prepared to be surprised to see it happen in the future."