In To Kill a Mockingbird, what is a "caste system," and why does Scout tell the reader about Alexandra's view of heredity?

A caste system is a strict social structure in which people are assigned a level of social status, from the lowest to the highest, based on the circumstances of their birth. No matter how good they are or how much they achieve, persons of a lower social class can never move into a higher social class; conversely, no matter how disreputable, lazy, or corrupt persons with high social standing might be, they will never lose their position in society. 

In her views of others, Alexandra exemplifies the caste system as it existed in the Old South. In her value system, those white citizens who could trace their heritage back the farthest enjoyed the highest level in Southern society. They were the descendents of the oldest and best (meaning wealthiest and land-owning) families, and therefore superior to others who were not born of those circumstances. In the caste system Alexandra observes, along with many other characters in the novel, families like the Finches have the highest social standing, whereas poor white families like the Cunninghams and the Ewells occupy a much lower rung on the social ladder. (Alexandra makes no distinction between the decency of Walter Cunningham and the contemptible nature of Bob Ewell.) Tom Robinson is superior to Bob Ewell in every way as a human being, but he ranks lowest in the Southern caste system because he is not a white man.

In having Scout explain her aunt's social views, Harper Lee develops Alexandra's character, develops Scout's character by showing her reaction to Alexandra's views, and develops the social setting of the novel.