How is this quote important to The Color of Water?"But there was a part of me that feared black power very deeply for the obvious reason. I thought...

This is a great question and a great quote. The
Color of Water by James McBride explores the author's quest for his identity.
While everyone is on this journey to some degree, McBride has good reason to feel
conflicted and confused about his place in the world. One of the two primary sources of
identity and conflict for McBride is religion (his mother is Jewish but works for most
of her adult life to hide that fact). The other is race, and this is the focus of the
quote you cite.

McBride's father was black and his mother
Ruth is obviously white, though in every possible way his mother denies her whiteness.
She lives most of her life in a predominantly black neighborhood in New York City and
raises her children to be black in every way except their educations. Though Ruth is
relatively colorblind, this is a racially charged time and the black militant movement
is gaining momentum. It was not always safe to be a white person in the middle of this
environment.

This quote expresses a black son's fear for
his white mother. He is afraid the "black power" movement will result in harm to his
white mother--an odd feeling for someone who is also black. When he
says,

"I had
swallowed the white man's fear of the Negro, as we were called back then,
whole,"

he is admitting that
he believes what most white people of the time believed--that all blacks were out to
somehow conquer or destroy the oppressive white world.

The
search for racial identity which is a major theme in this book is perfectly demonstrated
through this quote.