Racializ[ation] is most definitely a word.  When some says 'racialized' or racialization, assuming that they know the meaning of the word, they are attempting to convey, whether through direct or indirect examples, the process where 'stereotypes' are attached to racial/ethnic identities. I suppose the general path goes as follows:

racialization--->stigmatization-->marginalization/alienation/exclusion.

*It should be noted that my definition is basic and is open to expansion or debate.