Indentured servitude was a labor system where individuals, often from Europe, signed contracts to work for a specified number of years in exchange for passage to the Americas, room and board, and sometimes land at the end of their term. This practice played a crucial role in the economic development of Colonial America by providing a source of labor for plantations and other industries, while also contributing to the early construction of racial hierarchies as it often involved both European and African individuals under different conditions.