Xenophobia is a very human but irrational or unreasoned fear of that which is perceived to be foreign or strange.[1][2] It comes from the Greek words ξένος (xenos), meaning "stranger," "foreigner," and φόβος (phobos), meaning "fear."[3]
Xenophobia can manifest itself in many ways involving the relations and perceptions of an ingroup towards an outgroup, including a fear of losing identity, suspicion of its activities, aggression, and desire to eliminate its presence to secure a presumed purity.[4] Xenophobia can also be exhibited in the form of an "uncritical exaltation of another culture" in which a culture is ascribed "an unreal, stereotyped and exotic quality".[5] Vienna Declaration and Programme of Action urges all governments to take immediate measures and to develop strong policies to prevent and combat all forms and manifestations of racism, xenophobia or related intolerance, where necessary by enactment of appropriate legislation including penal measure.[6]
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Dictionary definitions of xenophobia include: deep-rooted, irrational hatred towards foreigners (Oxford English Dictionary; OED), unreasonable fear or hatred of the unfamiliar.(Webster's)[7]
A xenophobic person has to genuinely think or believe at some level that the target is in fact a foreigner. This arguably separates xenophobia from ordinary prejudice. In various contexts, the terms "xenophobia" and "racism" seem to be used interchangeably, though they can have wholly different meanings (xenophobia can be based on various aspects, racism being based solely on ethnicity, and ancestry). Xenophobia can also be directed simply to anyone outside a culture. Basically, a completely biased opinion regarding foreign matters.
Stereotypes arise from a fundamental human knowledge structure, the concept which generalizes prototypes from many instances. The problem comes when you start discriminating based on these stereotype in ways that counter accepted cultural values. Discriminating is the act where stereotyping is the thought process. When discriminating you start attributing good and bad evaluations of people based on that stereotype.