Biological classifications are based on how organisms are related.
Species is the most fundamental unit of classification.
Species evolve over time. Evolution is the consequence of the interactions of the potential for a species to increase its numbers, the genetic variability of offspring due to mutation and recombination of genes, a finite supply of the resources required for life, and the insuing selection by the environment of those offspring better able to survive and leave offspring. The great diversity of organisms is the result of more than 3.5 billion years of evolution that has filled every available niche with life forms. Organisms both cooperate and compete in ecosystems. The interrelationships and interdependencies of these organisms may generate ecosystems that are stable for hundreds or thousands of years.