As a village, Kanthapura is divided firmly by the Indian caste system, much like India is divided during this time period. This manifests in both physical and subtler ways—the village is literally divided into quarters for each caste, and the system is enforced by social oversight. Although there are friendships across certain classes, the Pariah class are uniformly treated as exiles from society and ostracized by all classes. Moorthy’s embrace of them is one of the greatest shocks to the existing social structure, and leads to his excommunication from the Brahmin class. Outsiders who do not fit into this traditional caste system, such as the Muslim Bade Khan, often find themselves without a place in the village—not exiled, but simply with no role to play.

This existing caste system is seen in other elements of the society as well, such as the Skeffington Coffee Estates. With no ties to the caste system, the British imperial government is able to take advantage of these divisions and find easy and loyal labor in the pariahs and laborers. Thus, the estate essentially has a colony of servants who would never consider leaving and put up with abominable treatment from the Sahib.