Stereotypes – beliefs about group differences – are more complex than is generally assumed. First, we address the multidimensionality of stereotypes under the framework of the Cubic EPA model which suggests that stereotypes are characterized by three dimensions: evaluation, potency, and accuracy. Specific attention is given to the relationship between stereotypes and totemic beliefs as collectively shared representations. Second, we review controversial research on the accuracy of stereotypes. Cultural stereotypes, personal stereotypes, judgment of individuals and groups, judgment criteria, and meta-analytical results are examined, revealing the robust relationship between stereotypes and reality. Finally, we point to the importance of explanations of group differences, especially the perception of essence that is encouraged by group entitativity (perceptual “oneness”). We suggest that stereotyping is particularly powerful for groups with high entitativity and a perceived essence, and that a group's totem is the manifestation of the group's essence. Though we cannot resolve all the controversies relating to stereotyping, our perspective emphasizes stereotypes as categories useful for human interaction and survival.