Rooted in religion and based on a division of labor, the caste system, among other things, dictates the type of occupations a person can pursue and the social interactions that she may have. Castes are an aspect of Hindu religion. Other religions in India do not follow this system.
-istan is a suffix in the Persian language (Farsi), denoting a place. Thus, Pakistan means place of the pure (pak=pure). It does not just refer to geographical areas, as in bimarestan=place of the sick=hospital. The suffix is widespread in Eurasia because of Persian influence (the Mughals of India for example used Farsi).
The remark represents a departure from years of attempts by Pakistan to deny its South Asian identity and link up instead with the Muslim Middle East. Geographically, linguistically, culturally and historically South Asia is a vital part of Pakistan's personality. Yet for decades a majority of Pakistani policy makers, intellectuals and strategists have attempted to virtually relocate Pakistan within the Muslim Arab Middle East. India's name is derived from the river Indus, which now flows primarily through Pakistan.