The dictionary definition of stereotype is " a widely held but fixed and oversimplified image or idea of a particular type of person or thing." But generally stereotype means, people put into groups based of their race, nationality, and/or sexuality. Stereotypes limit peoples' nature. Example : ( a stereotype mostly going on today ) someone from a different country coming to America or another country. Because of their race and/or nationality they are stereotyped. People say they are terrorists because they come from another country. Hope this helped! :)
A stereotype is the word used to describe a persons characteristics or even fashion choices as a perfect example of some 'medical or social label'. You would never refer to someone as a stereotype because it suggests those characteristics are all there is to know about the person which is considered extremely rude.
Example, 'a stereotypical hipster/car salesperson'.