This paper synthesizes two perspectives on essentialism: cognitive and social. The cognitive essentialist perspective argues that our bias to appeal to the psychological belief that categories have innate essences enables us to make inferences about social categories such as race, caste, and gender. The social essentialist perspective argues that essentialist thinking serves the needs of those in power to justify existing social and economic hierarchies. Examining the relationship between essentialism and power, this paper expands the framework for folk sociology, incorporating cognitive and social essentialist accounts to examine folk theories of social differences between caste, race, gender, and class, with a particular emphasis on social marginality and cultural narratives. Further, this paper discusses the relevance of the folk sociology perspective to the study of children’s emerging understanding of their social world.