What do Varna and Jati mean ?
The determining factors in the Varna system are merits, vocation and capabilities. It is important to understand that the Varna system and the Jati system are contradictory propositions. Varna is based on vocation ( or occupation and merit), while Jati is based on birth. These words are not synonyms and if they are used interchangeably as is most often done, the interpretation is completely wrong.
To clearly understand this, it is important that we go to the etymology of the words (i.e the root for these words). The word Varna in sanskrit is etymologically derived from roots that mean vocation which is chosen. Acharya Yaska clarifies this in his Niruktha ( 2-14) as Varna is something to do with choice/ the selection (and in this context – one’s occupation). There are some authors who view that Varna has something to do with color and opine that the varna system is based on the color of the skin, with the 'higher' Aryan classes being fair skinned and the 'lower' Dravidian classes being dark skinned. This view is not necessarily correct - from the point of view of the context in which it is used. Infact later texts consider the dark skinned 'dasyus' as not a part of the Varnas at all. They were considered outside the Varna system. That brings us to another question - was the varna system only for the Aryans and not for the Dravidians ? This is a question which has been considered at length by eminent scholars like Maraimalai Adigal and can be discussed later. For the moment, we will assume that Vedas are for all humanity and go forward understanding the import of the hymns.
Jati is something to do with birth. It is used as a synonym for Janma (or birth) as is used in contexts in the Niruktha ( 1-201) to mean 'blind and deaf by birth, and in ( 4-148),to mean - remembers his previous birth, and as 'Dwijathi' ( twice born – once at birth and once on initiation of study), and Ekajathi (once born – not initiated for study). As long as the system was based on merit and vocation it was called Varna vyavastha and when it became based on birth – it was called Jati Vyavastha.
Does the word jati appear in the Veda or any early Scriptures or text ?
No. It is interesting to note that Manu in his Manusmriti has not mentioned any Jati or (gotra) subcaste. He has mentioned only the four varnas. A much respected law giver missing to mention it clearly indicates the absence of this ( i.e the Jati Vyavasta) in his time.
More on what Manu has to say follows...