The term used to refer to mexico, central america, and the islands of the caribbean is:

The answer is "Middle America".

Middle America refers to the region which comprises the mid-latitudes of the Americas. The most part of southern North America, includes Mexico, the countries of Central America, and the Caribbean. Colombia and Venezuela are typically included in northern South America. The Caribbean is once in a while avoided from the area, and the Guianas are occasionally included.