There basically were only two categories (types, groups, castes) of people at the beginning of civilization -- locals (Vaishya belonging to Visha or a tribe) and non-locals (Shudra or outsiders, i.e. not belonging to the tribe which also included the latest arrivals from outside).

As the tribal living (living in groups or tribes in stead of wandering nomadically) became more common and established and the number of Vaishya (people in a tribe) grew larger, there was a need to bring some harmony in the society (tribe). Note that people originally, in newly formed tribes, probably had been trying to do everything by themselves, at the individual level, and things had become quite hectic and chaotic -- growing food, doing business, fighting the enemy (other tribes and nomads), and so on.

Thus Vaishya started dividing responsibility (tasks) in the society, especially in matters of leadership of the tribe, and compilation and transmission of knowledge or Veda. For example, they wanted a special person, able to lead them properly during fights etc. Similarly, because the volume of information available to them was increasing continuously and becoming cumbersome to manage, they wanted to assign the responsibility of compiling and transmitting knowledge (along with the rituals associated with it) to a bright and well-trained person.

For their leadership, Vaishya would elect a Kshatriya (chief of the tribe). About the Veda or knowledge, they started sending their bright young people to learn the Veda (taking many years to master it) and called them brahmin. A brahmin also would deal with the knowledge about Brahman / God and religious rites. Note that these positions / titles of brahmin and kshatriya were not meant to be passed onto the next generations (or on hereditary basis within the family). These choices were available to anyone in the Visha, according to the karma (work needed to be done) and the qualification (person’s guna).

Thus the remaining work in a Visha (i.e. after assigning the leadership duties to kshatriya and Veda work to a brahmin) – e.g. agriculture, carpentry, trading, leather work etc. – was done by the rest of the people (Vaishya). Note that, if the need arose, a brahmin or the kshatriya would also engage in doing all other jobs (agriculture, leather work etc.).

In addition, the non-locals (or Shudra), being new to the tribe -- like modern day immigrants -- would also help (provide service or seva to) the locals (Vaishya etc.) in doing their work. But, after living for some time with the tribe, these outsiders (non-locals) would also be treated as Vaishya becoming an integral part of the Visha.

This is the origin of castes (professional categories) or Varnas: Vaishya, Shudra, Kshatriya and Brahmin. And the system of tasks assigned thus (as explained in the above) is called the caste system or Hindu caste system.

Finally, it is clear that various vocations (varnas or castes) arose primarily from personal and societal needs (Appendix) and had little to do with heredity or birth.

-----------------------------

Appendix

(1) Purusa sukta in the Rig Veda: