After looking more at the Peter Ratliff who shows up (along w/ a Reuben)in the 1850 Census Owsley KY & then in 1870 in Franklin Co IL, I believe that this Peter was almost certainly connected to the Ratliffs of Patrick/Tazewell VA & Pike KY. The Owsley Peter's family includes names like Lucinda & Reuben - but they also have names like Valentine, a name associated with the descendants of Mullenex Ratcliffe. If it's true that Robert of Charles Co MD (who m. Mary Touchstone) was a descendant of Emanuel Ratcliffe, then the "Robert" Ratliff line & the "Mullenex" Ratliff line may indeed have a common source. It even begins to appear that the two lines followed each other down from Maryland through VA & on into KY, converging at places like Patrick & Wythe in VA, & Bath & Morgan in KY. This is just an hypothesis at this point, however.
Whether or not the 1850 Owsley Peter is descended from the "Robert" line or the "Mullenex" line, what's interesting is that Peter's descendants have a story that the Ratliffs were 'Pennsylvania Dutch.' The descendants of Peter & Ralph Ratliff (sons of Richard & Francis) have a 'Black Dutch' story. I think we can safely conclude from this that the meaning of Black Dutch for these Ratliffs is the meaning of 'Germanic,' the primary, original meaning before 'Black Dutch' became a cover for mixed ancestry.
Apparently, then, there is some real or perceived Germanic ancestry in this (these) Ratliff line(s). If the Owsley Peter is of the "Robert" line, and specifically descended from Richard & Francis or from his father Reuben (d 1810 Green Co KY) & Francis, then perhaps Reuben's wife was German or Swiss or Dutch. If the Owsley Peter is of the "Mullenex" line, then perhaps one of the wives in that line was of a Germanic family.
It could also be that Ratliff descendants living in SW VA & KY looked back on the Maryland origins of their Ratliff ancestors & wrongly (?) assumed that the family was German, given the heavy German settlement in the area from whence the Ratliffs came. This is not at all impossible. I have an ancestor, William Bishop, who gave his father's birthplace as 'England,' even though we know from other records that his father was born in Frederick Co Maryland, and his grandfather was from Germany. If one family could turn German into English, why couldn't another do the opposite?
The more I look at it, the more convinced I am that Richard, the father of Peter (d 1852 in Pike KY), was the Richard of Tazewell, son of Reuben & Frances, and that Reuben was the son of Robert & Mary Touchstone Ratliff of Charles Co MD - nothing else seems to fit, though there are still problems.
Unless some new evidence turns up, I think the Ratliff 'Cherokee' stories may be just an occurence of the ubiquitous 'Indian Princess' legends that so many Appalachian families have.