A system in which society ranks categories of people into a hierarchy system is referred to as social stratification. Strata is actually a Latin word that means "layers." Social stratification is a characteristic of a society, not based on individual traits and characteristics. Social stratification also continues through generations, but is subject to change within families. Social Stratification is universal, so it happens everywhere, all over the world. However, a stratification system in a third world country will not match that of a first world country as there is a difference in what is considered wealthy, powerful, and high status. Finally, a stratification system has a lot of inequalities. Factors such as race and gender play a factor in creating some inequalities. Some advantages are granted to some over others.
A system in which society ranks categories of people in a hierarchy is typically known as social stratification or a socially stratified system.
Social stratification puts groups of people (as opposed to individuals) into a hierarchy. This kind of hierarchy is not just based on the kinds of characteristics that make us different as individuals. In other words, it is not just based on the fact that one person is smarter than another or better looking. Instead, it is based on group characteristics like race, ethnicity, or sex.
The hierarchy into which social stratification puts people is also durable. This means that it does not change easily over time. In other words, if a certain ethnic group is on the bottom of the hierarchy in 2005, it will probably still be at the bottom in 2015. Change can occur, but it is difficult and slow to happen.
The answer to this question, then, is social stratification.
That sounds like a caste system. A caste system is a type of social stratification, or ranking of people. Stratification is based on the word strata which means layers.