Is the OP question really "what is it"? I personally think it's cultural neo-Marxism, where pressures are brought to bear to bring speech and thinking into line, primarily using fear as the motivator. The distinction to make is that right now it's 'grassroots' rather than hierarchically top-down; I put grassroots in scare quotes because I actually suspect that it only appears on the surface to be grass roots, whereas it's entirely possible that the roots of this can be traced to KGB activities back in the 60's and 70's.
I'm not even sure what cultural Neo-Maxism is. I think it's a buzz word used to attack something without getting to the meat of the problem.
To me, PC is nothing more than an expanded set of moral precepts and ethical considerations. It's a set of "shoulds". People should act this way. People shouldn't say these things. In this way, it's no different than any other set of societal standards. People should say "maam" or "sir" to the elderly. People should say "please" and "thank you". People should not engage in premarital sex or should get married. We've always had these things and attempted to enforce these things at different levels. Family. Community. Society.
What makes PC look different is that these "shoulds", these moral precepts, are coming out of academia and intelligentsia, and being pushed into government and back into academia, and attempted to be transformed into law and regulation. This really isn't different either, historically. It's no different then miscegenation being made illegal, or sodomy being illegal, or that you should stand for the National Anthem.
What is different is that we just spent the last 50-100 years of the 20th century breaking down a lot of the laws and regulations of these sort, governing decorum and polite interaction, in the name of freedom, tolerance, and equality. And it came from academia and the intelligentsia. There is a deep dissonance between the message that you should accept that people have differing views on polite society, and the later message that these people should be castigated, shunned, and socially/legally punished. On one hand we should accept that some people believe that interracial marriage or homosexuality is not immoral, and not socially attack these people, and the idea that we should socially attack people who are against interracial marriage or homosexuality.
In this way, PC is just another weapon in cultural warfare. It's no more than the public pressure arm of progressivism. I don't think the problem lies with it's purported ends, but with it's means, and what end these means are actually achieving.