"O Mankind, We created you from a single (pair) of a male and a female and made you into nations and tribes, that you may know each other. Verily the most honored of you in the sight of God is he who is the most righteous of you"
Explanation: There are several principles, which this verse presents:
This message is not just for Muslims only because Allah is addressing all of humanity. While Muslims are one brotherhood, this is part of a larger brotherhood of humanity.
Allah is telling us that He has created us. Therefore He knows the best about us.
He says that He created us from one man and one woman meaning then that we are all the same.
It also means that all human beings are created through the same process, not in a manner in which some are created with a better mechanism than others.
Allah is the One who made human beings into different groups and people.
These differences are not wrong, rather a sign from Allah
"And among His Signs is the creation of the heavens and the earth, and the difference of your languages and colors. Verily, in that are indeed signs for those who know"
Note that no word equivalent to race is used in this ayah or any other verse of the Qur'an.
Islam, however, limits the purpose of these distinctions to differentiation and knowing each other. This is not meant to be a source of beating each other down with an attitude of 'my group is better than your group' or false pride as is the case with tribalism, nationalism, colonialism, and racism.
The only source of preference or greatness among human beings is not on a national or group level, but it is at the individual level.
One individual who is (higher in Taqwa), more conscious of his Creator and is staying away from the bad and doing the good is better, no matter what nation, country or caste he is part of. Individual piety is the only thing that makes a person better and greater than the other one.
However, the only criterion of preference, Taqwa, is not measurable by human beings. Indeed Allah is the One Who knows and is aware of everything so we should leave even this criterion to Allah to decide instead of human beings judging each other.
These are the deeply embedded ideals of Islam which still bring people to this way of life even though Muslims are not on the best level of iman today. This is what changed the heart of a racist Malcolm X when he performed Hajj in Makkah. This is the power that brought Muhammad Ali to Islam. This is what still attracts the Untouchables of India towards Islam. This is the theory which convinced noted historian Professor A.J. Toynbee in 1948 to say that: "The extinction of race consciousness as between Muslims is one of the outstanding achievements of Islam, and in the contemporary world there is, as it happens, a crying need for the propagation of this Islamic virtue."
From the Sunnah
Prophet's response to racist comments:
A man once visited the Prophet's mosque in Madinah. There he saw a group of people sitting and discussing their faith together. Among them were Salman (who came from Persia), Suhayb who grew up in the Eastern Roman empire and was regarded as a Greek, and Bilal who was an African. The man then said:
"If the (Madinan) tribes of Aws and Khazraj support Muhammad, they are his people (that is, Arabs like him). But what are these people doing here?"
The Prophet became very angry when this was reported to him. Straightaway, he went to the mosque and summoned people to a Salat. He then addressed them saying:
"O people, know that the Lord and Sustainer is One. Your ancestor is one, your faith is one. The Arabism of anyone of you is not from your mother or father. It is no more than a tongue (language). Whoever speaks Arabic is an Arab."
(As q_quoted in Islam The Natural Way by Abdul Wahid Hamid p. 125)
Statement of the universal brotherhood in the last Sermon:
O people, Remember that your Lord is One. An Arab has no superiority over a non-Arab nor a non-Arab has any superiority over an Arab; also a black has no superiority over white, nor a white has any superiority over black, except by piety and good action (Taqwa). Indeed the best among you is the one with the best character (Taqwa). Listen to me. Did I convey this to you properly? People responded, Yes. O messenger of Allah, The Prophet then said, then each one of you who is there must convey this to everyone not present.
(Excerpt from the Prophet's Last Sermon as in Baihiqi)
Don't take pride in ancestry:
The Prophet said: Let people stop boasting about their ancestors. One is only a pious believer or a miserable sinner. All men are sons of Adam, and Adam came from dust
(Abu Dawud, Tirmidhi)
Looking down upon other people will stop you from entering the Jannah:
The Prophet said: Whoever has pride in his heart equal to the weight of an atom shall not enter Paradise. A man inquired about a person who likes to wear beautiful clothes and fine shoes, and he answered: Allah is beautiful and likes beauty. Then he explained pride means rejecting the truth because of self-esteem and looking down on other people.
The Prophet condemnation of Arab racial pride:
There are many hadith, which repeatedly strike on the Arab pride of jahiliyyah. Arabs before Islam used to look down upon others specially blacks. The Prophet repeatedly contrasted the believing Africans versus non-believing Arab nobles.
The Prophet said: You should listen to and obey your ruler even if he was an Ethiopian slave whose head looked like a raisin.