Social stigma
Social stigma is severe social disapproval of personal characteristics or beliefs that are against cultural norms. Social stigma often leads to marginalization.
Examples of existing or historic social stigmas can be physical or mental disabilities and disorders, as well as illegitimacy, homosexuality or affiliation with a specific nationality, religion (or lack of religion) or ethnicity, such as being a Jew, an African American, or a Gypsy.  Likewise, criminality carries a strong social stigma.
Stigma comes in three forms: Overt or external deformations. Examples of this are scars, physical manifestations of anorexia nervosa, leprosy, or a physical disability.   Second, the known deviations in personal traits.  For example, drug addicts, alcoholics, and criminals are stigmatized in this way.  Third, "tribal stigmas" are traits of a race, nation, or religion that constitute a deviation from the normative race, nationality or religion.  For example, Jewish people in Nazi Germany.
Although the specific social categories that become stigmatized can vary across times and places, the three basic forms of stigma (physical deformity, poor personal traits, and tribal outgroup status) are found in most cultures and time periods, leading some psychologists to hypothesize that the tendency to stigmatize may have evolutionary roots.

# Link and Phelan Stigmatization Model
Bruce Link and Jo Phelan propose that stigma exists when four specific components converge.  (1) Individuals differentiate and label human variations. (2) Prevailing cultural beliefs tie those labeled to adverse attributes. (3) Labeled individuals are placed in distinguished groups that serve to establish a sense of disconnection between us and them. (4) Labeled individuals experience status loss and discrimination that leads to unequal circumstances. In this model stigmatization is also contingent on access to social, economic, and political power that allows the identification of differences, construction of stereotypes, the separation of labeled persons into distinct groups, and the full execution of disapproval, rejection, exclusion, and discrimination.  Subsequently, in this model the term stigma is applied when labeling, stereotyping, disconnection, status loss, and discrimination all exist within a power situation that facilitates stigma to occur.
Differentiation and Labeling
Identifying which human differences are salient, and therefore worthy of labeling, is a social process.  There are two primary factors to examine when considering the extent to which this process is a social one.  The first issue is the fact that significant oversimplification is needed to create groups.  The broad groups of black and white, homosexual and heterosexual, and young and old are all examples of this.  Secondly, the differences that are socially judged to be relevant differ vastly according to time and place.  An example of this is the emphasis that was put on the size of forehead and faces of individuals in the late nineteenth century  which was believed to be an indication of a persons degree of criminal nature.
Linking to Stereotypes
The second component of this model centers on the linking of labeled differences with stereotypes.  Goffmans 1963 work made this aspect of stigma prominent and it has remained so ever since.  This process of applying certain stereotypes to differentiated groups of individuals has garnered a large amount of attention and research in recent decades as it helps to understand the psychological nature of the thought process taking place as this linkage occurs.
Us and Them
The linking of negative attributes to differentiated groups of individuals described above facilitates a sense of separation between the proverbial us and them. This sense that the individuals of the labeled group are fundamentally different causes stereotyping to take place with little hesitation.  The "us" and "them" component of the stigmatization process implies that the labeled group is slightly less human in nature, and at the extreme not human at all.  It is at this extreme that the most horrific events occur.
Disadvantage
The fourth component of stigmatization in this model includes the status loss and discrimination that is experienced.  Many definitions of stigma do not include this aspect, however it is the belief of these authors that this loss occurs inherently as individuals are labeled, set apart, and linked to undesirable characteristics.  The members of the labeled groups are subsequently disadvantaged in the most common group of life chances including income, education, mental well-being, housing status, health, and medical treatment.  However, the authors are quick to point out that even though some groups are able to escape some of the disadvantages listed, the principle is sound when broadly applied.
Necessity of Power
The authors also emphasize the necessity of power (social, economic, and political power) to stigmatize.  While the role of power is clear in some situations, in others it can become masked as the power differences are so stark.  An extreme example of a situation in which the power role was explicitly clear was the treatment of Jewish people by the Nazis.  On the other hand, an example of a situation in which individuals of a stigmatized group have stigma-related processes occurring would be the inmates of a prison.  It is very imaginable that each of the steps described above would take place regarding the inmates thoughts about the guards.  However, this situation cannot involve true stigmatization according to this model because the prisoners do not have the economic, political, or social power to act on these thoughts with any serious discriminatory consequences.