The varna system is a social hierarchy that categorizes individuals in Hindu society into four main groups: Brahmins (priests and scholars), Kshatriyas (warriors and rulers), Vaishyas (traders and agriculturists), and Shudras (laborers and service providers). This classification has its roots in ancient Hindu texts and is crucial for understanding the development of social structures within Hinduism, as it shaped not only religious practices but also socio-economic roles over time.