Yes, colored is in the scrabble dictionary

...and is worth 12 points by itself.

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Colored Definition

noun

Offensive A Black person; an African American.
from The American Heritage Dictionary of the English Language, 4th Edition
Offensive A person belonging to a racial group not categorized as white.
from The American Heritage Dictionary of the English Language, 4th Edition
Offensive A person of mixed racial descent.
from The American Heritage Dictionary of the English Language, 4th Edition
South African A person belonging to the Coloured population grouping, especially during apartheid.
from The American Heritage Dictionary of the English Language, 4th Edition
A person of a race other than the white or of mixed race.
from Free Scrabble Dictionary

adjective

Distorted or biased, as by irrelevant or incorrect information.
from The American Heritage Dictionary of the English Language, 4th Edition
Having color: colored tissue paper.
from The American Heritage Dictionary of the English Language, 4th Edition
Often Offensive Black or African-American.
from The American Heritage Dictionary of the English Language, 4th Edition
Often Offensive Of mixed racial descent.
from The American Heritage Dictionary of the English Language, 4th Edition
Often Offensive Of or belonging to a racial group not categorized as white.
from The American Heritage Dictionary of the English Language, 4th Edition

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Wildcard(?) letters appear in RED

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Top Words by points

Points

colored

10

2 letter words with COLORED

Points

re

2

de

3

do

3

or

2

oe

2

od

3

lo

2

ed

3

er

2

el

2

3 letter words with COLORED

Points

eld

4

rec

5

del

4

doc

6

doe

4

dor

4

eco

5

dol

4

led

4

loo

3

ore

3

ode

4

old

4

ole

3

orc

5

cel

5

cod

6

col

5

coo

5

cor

5

red

4

roc

5

rod

4

roe

3

roo

3

4 letter words with COLORED

Points

cool

6

cord

7

cole

6

cold

7

loco

6

lode

5

lord

5

lore

4

odor

5

coed

7

code

7

clod

7

cero

6

core

6

role

4

deco

7

doer

5

dole

5

door

5

dore

5

orle

4

ordo

5

oleo

4

olde

5

rood

5

redo

5

cred

7

rode

5

5 letter words with COLORED

Points

older

6

rodeo

6

looed

6

ceorl

7

coder

8

coled

8

color

7

cooed

8

cooer

7

cored

8

credo

8

decor

8

dolce

8

dolor

6

drool

6

6 letter words with COLORED

Points

cooled

9

colder

9

cooler

8

locoed

9

7 letter words with COLORED

Points

colored

10

decolor

10

Found 84 words in 0.22591 seconds