What made the air on the show was that Zendaya's dreadlocks possibly smelled like "patchouli oil and weed," but there was more that didn't make the show, said Rancic, 40.
"I made [the joke] as a reference to the hippie culture. It was a bohemian-chic reference, not about race, nor would it ever be," she told People magazine. "On set, I made peace signs and I said boho twice."
In fact, Rancic, who regrets that people interpreted the joke in a racial way, said she didn't write the joke and added, "It was edited. And my words were taken out of context. If I thought this joke could be interpreted another way, I never would have done it. I felt horrible."
She continued, "There were about 50 sets of eyeballs on set that day and not one person thought that it had the undertones that it ended up having once it aired because they heard it in context."
The backlash came online, as Rancic got "death threats."
"People were sending me pictures of the barrel of a gun saying, 'I'm going to kill your family.' It was awful," she said, adding that she isn't surprised the show is on hiatus and that two co-hosts have left.
"There were just all sorts of problems. I really believe it was only a matter of time before that specific show with that cast and that format fell apart," she said.