Answer by taking a quote from the following article:

Melungeon ( m@-LUN-j@n) is a term traditionally applied to one of numerous "tri-racial isolate" groups of the Southeastern United States. Historically, Melungeons were associated with the Cumberland Gap area of central Appalachia, which includes portions of East Tennessee, Southwest Virginia, and eastern Kentucky. Tri-racial describes populations thought to be of mixed European, African and Native American ancestry. Although there is no consensus on how many such groups exist, estimates range as high as 200.

The ancestry and identity of Melungeons has been a highly controversial subject. Secondary sources disagree as to their ethnic, linguistic, cultural, and geographic origins and identity, as they are of mixed racial ancestry. They might accurately be described as a loose collection of families of diverse origins who migrated, settled near each other, and intermarried, mostly in Hancock and Hawkins counties in Tennessee, nearby areas of Kentucky, and in Lee County, Virginia. Their ancestors can usually be traced back to colonial Virginia and the Carolinas. They were largely endogamous, marrying primarily within their community until about 1900.  Melungeons have been defined as having multiracial ancestry. They did not exhibit characteristics that could be classified as those of a single racial phenotype. Most modern-day descendants of Appalachian families traditionally regarded as Melungeon are generally European American in appearance, often (though not always) with dark hair and eyes, and a swarthy or olive complexion. Descriptions of Melungeons have varied widely over time; in the 19th and early 20th century, they were sometimes identified as "Portuguese," "Native American," or "light-skinned African American". During the ninetee|nth century, free people of color sometimes identified as Portuguese or Native American in order to avoid being classified as black in the segregated slave societies. Other Melungeon individuals and families are accepted and identify as white, particularly since the mid-20th century. They have tended to "marry white" since before the twentieth century.  Scholars and commentators do not agree on who should be included under the term Melungeon. Contemporary authors identify differing lists of surnames to be included as families associated with Melungeons. The English surname Gibson and Irish surname Collins appear frequently; genealogist Pat Elder calls them "core" surnames. Vardy Collins and Shep Gibson had settled in Hancock County, and they and other Melungeons are documented by land deeds, slave sales and marriage licenses. Other researchers include the surnames Powell, LeBon, Bolling, Bunch, Goins, Goodman, Heard, Minor, Mise, those Mullins who are not descended from Booker Mullins (1768-1864) , and several others. Descendants of Booker Mullins are excluded because 1) the Mullins Y-DNA Project in Virginia confirmed that Booker was the son of Sherwood/Sherrod Adkins and is not a "true Mullins" and 2) DNA-tests of Booker's descendants do not have an Melungeon markers in their DNA. (Family lines have to be researched individually, as not all families with these surnames are Melungeon.) As with many other surname groups, not all families with each surname have the same racial background and ancestry.  The original meaning of the word "Melungeon" is obscure (see Etymology below). From about the mid-19th to the late 20th centuries, it referred exclusively to one tri-racial isolate group, the descendants of the multiracial Collins, Gibson, and several other related families at Newman's Ridge, Vardy Valley, and other settlements in and around Hancock and Hawkins counties, Tennessee.

What where the ancetors about
Their ancestors can usually be traced back to colonial Virginia and the Carolinas.