We do not probably know. Perhaps there were guilds of people engaged in different occupations and on various other factors like tribes, regions in which particular people lived, languages they spoke, and the traditions they followed. Then Aryans came with their four-fold division of society, the priests (Brahmins), the warriors (Kshatriyas), the traders and agriculturists (Vaishyas), and the salaried workers (Shudras). The two systems coalesced to give a four-fold division with hundreds of sub-divisions. The caste system is now on the way out. The Indian Constitution is strongly against it.

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