Stereotypes are widely held beliefs about a specific group of individuals, based on, but not limited to, ethnicity, gender, colour, country, religion, profession or social strata. These beliefs are about behavior, lifestyle, choices and so on. They can be loosely called to be manifestations of inductive generalisation. The essential question is, from where does one get the stereotypes.
Stereotypes being a cultural issue, it is often inherited from the most important cultural influencers in life. While this list of influencers could vary for every individual, in my case, I feel it mostly comes from family, colleagues, friends, teachers, religion, education (and educational institutions), cities and states I have lived in(10 states so far, and counting!), games such as cricket and Tennis that I follow.
An argument is forwarded sometimes that stereotyping is sometimes good because it provides an initial behavioral clue to an individual, in the absence of any other information. The hint is, that if I meet a certain Mr. Tokuyama from Japan for the first time, my beliefs about the Japanese should guide my behavioral expectations of Tokuyama san. In real life, Tokuyama san could turn out to be very different from the mental image borne by me of Japanese executives.
While it is nearly impossible to be free of all forms of stereotypes, such characterization, which at best should be treated as a hypothesis and never a firm opinion, needs to gradually improve when newer experiences happen.
The detrimental dimension of stereotype is prejudice, which negatively guides our behaviour based on our beliefs about people of specific ethnicity, colour, country, religion, profession or social strata. It is often presumptuous. Prejudice is very much internal to an individual and often stays latent for years, only getting expressed on certain trigger events.