The word gentile has been used with varying meanings, as indicated in this statement by Elder Bruce R. McConkie:
In the days of Abraham, the term [gentile] was used to refer to those nations and peoples who had not descended from him, with the added assurance that all Gentiles who should receive the gospel would be adopted into the lineage of Abraham and be accounted his seed. (Abra. 2:9-11.) The Prophet taught that those so adopted became literally of the blood of Abraham. (Teachings, pp. 149-150.) In the days of ancient Israel, those not of the lineage of Jacob were considered to be Gentiles, although the Arabs and other races of Semitic origin who traced their lineage back to Abraham would not have been Gentiles in the strict Abrahamic use of the word.After the Kingdom of Israel was destroyed and the Ten Tribes were led away into Assyrian captivity, those of the Kingdom of Judah called themselves Jews and designated all others as Gentiles. It is this concept that would have been taught to Lehi, Mulek and the other Jews who came to the Western Hemisphere to found the great Nephite and Lamanite civilizations. It is not surprising, therefore, to find the Book of Mormon repeatedly speaking of Jew and Gentile as though this phrase marked a division between all men; to find the United States described as a Gentile Nation (1 Ne. 13; 3 Ne. 21); and to find the promise that the Book of Mormon would come forth “by way of the Gentile.” (Title page of Book of Mormon; D. & C. 20:9.)
Actually, of course, the house of Israel has been scattered among all nations, and Joseph Smith (through whom the Book of Mormon was revealed) was of the Tribe of Ephraim. At the same time the Prophet was of the Gentiles, meaning that he was a citizen of a Gentile nation and also that he was not a Jew. Members of the Church in general are both of Israel and of the Gentiles. Indeed, the gospel has come forth in the last days in the times of the Gentiles and, in large measure, will not go to the Jews until the Gentile fulness comes in. (D. & C. 45:28-30.)
Having in mind the principle that Gentiles are adopted into the lineage of Israel when they accept the gospel, and that those who fail to believe the truths of salvation (no matter what their lineage) lose any preferential status they may have had, it is not inappropriate in our day to speak of members of the Church as Israelites and unbelievers as Gentiles. (Mormon Doctrine, pp. 310-11.)