Several etymologies for Vanniyar have been suggested, including the Sanskrit vahni ("fire"), the Dravidian val ("strength"), or the Sanskrit or Pali vana ("forest"). The term Palli is widely used to describe them but is considered to be derogatory.
Alf Hiltebeitel notes that the Vanniyars derive their caste name from Vahni. Vahni itself is thought to yield the Tamil word Vanni (fire), which is also a Tamil name for an important tree. The connection to the sage leads to further associations with mythological legends.
Hiltebeitel, who classifies the Vanniyar as Shudra in the Hindu varna system, notes that South Indian society traditionally recognised neither the Kshatriya (warrior) nor Vaishya (provider) varnas, being divided instead between Brahmins on the one hand and Shudras and untouchables on the other. Nonetheless, communities in the region frequently sought to prove a historic higher status, based on myth or occasionally probable history. He notes that "traditions of demotion from a once higher rank are a commonplace of South Indian caste mythologies". Researcher Lloyd I. Rudolph notes that as early as in 1833, the Vanniyar, who were then known as Pallis, had ceased to accept their "low caste" status, also described as being Shudra by Christophe Jaffrelot and Kathleen Gough. Gough, however, documenting her fieldwork of 1951-53, records the Palli and the Vanniyar as separate but similar cultivating castes.[a]
The Pallis tried to get an order in Pondicherry that by descent they were not a low agricultural caste. In preparation for the 1871 Indian census they petitioned to be recognised as being of the Kshatriya varna. They formed a number of caste organisations using their preferred name, with the Vanniyakula Kshatriya Maha Sangam appearing in Madras in 1888 and extending state-wide in 1952.[b] By 1931, due to their successful politicking (a process known as sanskritisation), the term Palli was removed from the Madras census, with the term Vanniya Kula Kshatriya appearing instead. The reinvention of their history through sanskritisation, and thus the change in their status to Vanniyar rather than Palli, was evidenced in the community adopting such practices as vegetarianism and prohibiting the remarriage of widows, and what Rudolph terms a "radically revisionist history" was supported by claims of descent from the ancient Pallava dynasty.
According to Hiltebeitel, whilst the mythological claims of origin from the fire lend credence to their demand for being deemed as Khatriyas, the claims to military origins and Kshatriya identity did not solely rely on myths. He notes that they had historically adopted various titles and terms that signified a self-image of Kshatriya status, including the Vanniyar name itself, and that
beyond linguistic indicators ... The Vanniyars' Kshatriya claims are rooted in their history. There is, to begin with, no reason to discount the ... traditions that Vanniyars formed an important part of the Pallava soldiery. And after the Pallava period there is increasing evidence of Vanniyars assuming "Kshatriya" roles and activities.
The caste has also been significant in the practices of the Draupaudi cult, together with the Konars and Vellalar Mudaliars, and quite possibly were the instigators of it, with the other two communities being later adopters.
In addition to domestic slavery there were number of agricultural labor relationships. According to Ravi Ahuja, Paraiyar or Palli farmhands sometimes called pannaiyals were collectively bound to their home village soil. Pallis mobility was severely restricted but the powers exercised by their masters were also limited such slaves cannot be expelled or transferred to another village, even if the masters left the region themselves. As Dharma Kumar, argues the term slavery does not adequately describe the many forms of bondage existing with in the traditional agrarian society. Caste involved a number of criteria slavery like criteria like restriction of freedom, forced labor and ownership.
Rudolph noted that, although "necessarily tentative" because of being based on figures from the 1931 census, the Vanniyars in the 1980s constituted around 10 per cent of the population of Tamil Nadu, being particularly prevalent in the northernmost districts of Chingelput, North Arcot, South Arcot and Salem, where they formed around 25 per cent of the population. Traditionally, most Vanniyars are agricultural labourers but they are increasingly benefiting from political influence and organisation and they now own 50 per cent of the lands of the traditional landowners. The Vanniyars who previously were of the Backward Class category, were now designated as a Most Backward Caste after successful agitations by them in the 1980s. The reason for the agitation and subsequent re-classification was to avail more government benefits for the community.
During the growth of Tamil Nadu's economy, the Vanniyars have mostly stuck with agriculture, buying up the lands of erstwhile landlords who were moving to urban areas. However, they have been hurt significantly by the rising debt crisis engulfing Tamil Nadu agriculture, and many now work as day labourers in Bengaluru and Chennai.