This is an extremely problematic and racist book. See Vine Deloria Jr.'s essay in the edited collection, "Natives and Academics: Researching and Writing about American Indians" (1998), for a thorough deconstruction of the arguments of each chapter. The collection is edited by Devan A. Mihesuah. Deloria's chapter is called, "Comfortable fictions and the struggle for turf: An essay review of The Invented Indian: Cultural Fictions and Government Policies".
Deloria doesn't find major problems in every chapter. But almost all of them are revealed to be deeply flawed and problematic. He appreciates the Richard de Mille chapter, "Distinguishing two components of truth", and the Christian Feest Chapter, "Europe's Indians" (even if the latter is disturbing because it shows "Europeans build up fantasies about Indians the same way American Whites do" [p.81 of the Mihesuah book]).
Deloria concludes, though, that "Every Indian should read this book [The Invented Indian] because it does represent the attitude of a significant percentage of American and Canadian citizens who, knowing very little of their own history and having great personal psychological problems, tend to vest their hope for reality in an image of savage nobility which they and their predecessors have created. Not willing to admit it, they then blame us for perpetuating whatever images become popular among whites" (p.82 of the Mihesuah book).
Deloria's chapter was also published in the Winter 1996 edition of America Indian Quarterly (the special issue published there was the basis for the publication of the Mihesuah edited book).