The word "caste," used to describe the system of social groups in modern India, comes from the Portuguese and was not used before the 16th century AD. The Sanskrit word for caste, varna, used from Vedic times, means "color," and its usage probably reflects the formation of a new social group following the subjugation of the dark-skinned indigenous Dasas by the light-skinned Aryans. When the latter first came to India, they were divided into three social classes, the kshatriyas (warriors or aristocracy), the brahmans (preists), and the vaishyas (cultivators). There were no castes, but these divisions probably facilitated the social and economic organization of the tribes.

The treatment of the Dasas, perhaps stemming from the Aryans' fear of assimilation, was the first step taken in the direction of caste, a system of hierarchial ranking, based on religious rules of ritual purity. The Dasas and and those of mixed Aryan and Dasa origin, and thus impure, became the lowest caste, the shudras. The subsequent elevation of the brahmans to the highest caste, above the kshatriyas, was linked to the emergence of divine kingship. According to the brahmans, only by their preistly authority could divinity be transmitted to the king. This change also gave religious sanction to caste, which became hereditary and increasingly rigid, with prohibitions forbidding contact between castes. With the formation of a wealthy merchant class, there was a further modification, as this group became the vaishyas. The cultivators, or ordinary people, were moved down to become the fourth caste of the shudras, which in turn regulated the former shudras to a casteless group known as the untouchables.