When someone asks what's your background?

naturally
What do they want to know? Is it where your parents were born / come from or your ethnicity (where your oldest ancestor comes from) E.g. Over several generations my family had "begun" in Italy, migrated to south America and now to Australia. My parents were born in South America but we descend from our ancestors in Italy. So what do I say when someone asks me: what is my background?
Updates
+1 y
Thanks everybody.


Most people are in agreement that they're asking for my ethnicity, My ancestor originating from Italy means my ethnicity is Latin European so I say that?
When someone asks what's your background?
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