Since this system was so crucial to preserving Indian knowledge and skills, there were very strict rules when it came to marriage. People could only marry within their own jati class, which prevented the dillution of knowledge. The health problems of inbreeding were well known to the Indians, and so they decided that people could not marry within their own village. This had the secondary effect of distributing knowledge and techniques from one village to the next.
Warriors that invaded India were frequently integrated into its system. The warrior jati class was in chronic shortage (they tend to die a lot), so these invaders easily became part of the elite warrior jati.
The economic system did not require money or even barter. Every person belonged to a group under a large land owner, and would be allocated resources based on their contributions to the village and their jati. A peasant perceived to be hard working would get more food than one thought to be lazy, but never as much as a priest (brahman). The jati hierarchy was based on how important different groups were perceived to be to village life, and this was the justification for the unequal allocation of resources.