The paper is theoretical in nature and the data for the same has been collected from various secondary sources. A serious and prevailing challenge to international security at present times is that of “Ethnic Conflict”. If they are left unchecked, they may pose a serious threat to the structure of society in which they occur. This paper tries to give a sincere effort to understand ethnicity from various perspectives given by various theorists from time to time and also it tries to explain how ethnicity helps in categorization of people by defining them as ‘’in group’ and ‘out group’ based on the group membership, which in turn tries to give a source to generate ethnic consciousness between various group members. At last paper tries to depict various sources that generate conflict between various groups based on ethnic terms. It is noteworthy that, every conflict has not the same intensity and consequences worldwide. They differ from place to place and region to region. People are tortured, Killed, maimed, raped. The importance of ethnic conflict, as a force shaping human affairs, as a phenomenon to be understood, as a threat to be controlled, can no longer be denied. By one reckoning, ethnic violence since World War II has claimed more than ten million lives.