How did spanish settlers divide themselves into categories?

Slavery in the Spanish American colonies was an economic and social institution central to the operations of the Spanish Empire - it bound Africans and indigenous people to a relationship of colonial exploitation. The Spanish colonists provided the Americas with a colonial precedent for slavery and influenced the development of modern racial ideologies, such as limpieza de sangre. Early on, however, opposition from the enslaved and from influential Spaniards moved the Crown to limit the bondage of indigenous people, and initiated debates that challenged the idea of slavery based on race. Spaniards regarded some indigenous people as tribute under the encomienda system during the late 1400s and part of the 1500s.[1]

Spanish slavery in the Americas did not diverge drastically from that in other European colonies. It reshuffled the Atlantic World's populations through forced migrations, helped transfer American wealth to Europe, and promoted racial and social hierarchies (castas) throughout the empire.[2] Spanish enslavers justified their wealth and status earned at the expense of captive workers by portraying them as inferior beings and holding them as personal properties (chattel slavery), often under barbarous conditions.[3] In fact, Spanish colonization set some egregious records in the field of slavery.[4] The Asiento, the official contract for trading in slaves in the vast Spanish territories was a major engine of the Atlantic slave trade. When Spain first enslaved Native Americans on Hispaniola, and then replaced them with captive Africans, it established unfree labor as the basis for colonial mass-production. The tale of Spanish exploits in the Americas, amplified for propagandistic reasons, earned such notoriety that European rivals called it the Black Legend. And in the mid-nineteenth century, as most countries in the hemisphere moved to disallow chattel slavery, Cuba and Puerto Rico - the last two remaining Spanish American colonies - maintained slavery the longest.[a][5]

answer; /// the above statement is ( true);

answer; did not understand that the act was wrong because she/he was suffering from a mental illness;