Indeed it can. It's origins as an insult in schools are likely from the cognitively delayed use. While that is now perhaps not the case...

On the plus side ARC and other agencies that work with adults and children with developmental disabilities no longer use the term "retarded" to refer to their clients. While ARC used to mean "The association of Retarded Citizens" they now officially just call themselves ARC or ARCA and do not use the term.
Hopefully then, if persons with developmental disabilities are never referred to as retarded the origins of the term as an insult will have no direct impact.

Originally posted by Soledad
Retarded means slow or underdeveloped and can have many uses.