Ashtadhyayi Sanskrit treatise on grammar was written in the 6th to 5th century BCE by the Indian grammarian Panini. This work set the linguistic standards for Classical Sanskrit. It sums up in 4,000 sutras the science of phonetics and grammar that had evolved in the Vedic religion. Panini divided his work into eight chapters, each of which is further divided into quarter chapters, beyond defining the morphology and syntax of Sanskrit language.

A treatise called Astadhyayi (or Astaka) is Panini's major work. It consists of eight chapters, each subdivided into quarter chapters. In this work Panini distinguishes between the language of sacred texts and the usual language of communication. Panini gives formal production rules and definitions to describe Sanskrit grammar. Starting with about 1700 basic elements like nouns, verbs, vowels, consonants he put them into classes. The construction of sentences, compound nouns etc., is explained as ordered rules operating on underlying structures in a manner similar to modern theory. In many ways Panini's constructions are similar to the way that a mathematical function is defined today.

The accepted cultivated speech of the contemporary language that Pāṇini describes in his Aṣṭādhyāyī must have coexisted with more vernacular varieties of speech in which there were features belonging to the Middle Indo-Aryan division of the language group. Several facts support this view.

A grammar of a language purports to be a description of the ideal speaker-hearer’s intrinsic competence. If the grammar is, furthermore, perfectly explicit—in other words, if it does not rely on the intelligence of the understanding reader but rather provides an explicit analysis of his contribution—we may (somewhat redundantly) call it a generative grammar.

For language to be generative, children must not be learning by rote. Music is also generative. For every musical phrase I hear, I can always add a note... to generate a new musical phrase.

Within modern linguistics, it is chiefly within the last few years that fairly substantial attempts have been made to construct explicit generative grammars for particular languages and to explore their consequences. No great surprise should be occasioned by the extensive discussion and debate concerning the proper formulation of the theory of generative grammar and the correct description of the languages that have been most intensively studied. The tentative character of any conclusions that can now be advanced concerning linguistic theory, or, for that matter, English grammar, should certainly be obvious to anyone working in this area. (It is sufficient to consider the vast range of linguistic phenomena that have resisted insightful formulation in any terms.) Still, it seems that certain fairly substantial conclusions are emerging and receiving continually increased support. In particular, the central role of grammatical transformations in any empirically adequate generative grammar seems to me to be established quite firmly, though there remain many questions as to the proper form of the theory of transformational grammar.

Grammars (vyākaraṇas) concern the description of speech forms (śabda) considered to be correct (sādhu) through derivation and thereby serve to make understood the usage found in the Vedas. The grammar that was granted the status of a Vedāṅga is that of Pāṇini. This work is referred to in toto as a śabdānuśāsana (means of instruction of correct speech forms); since the core of Pāṇini’s work comprises the eight chapters of sūtras that serve to describe both the current language of his time and features particular to Vedic, it also bears the name Aṣṭādhyāyī (“Collection of Eight Chapters”).

Ever since his first ecstasy or vision of Christminster and its possibilities, Jude had meditated much and curiously on the probable sort of process that was involved in turning the expressions of one language into those of another. He concluded that a grammar of the required tongue would contain, primarily, a rule, prescription, or clue of the nature of a secret cipher, which, once known, would enable him, by merely applying it, to change at will all words of his own speech into those of the foreign one. His childish idea was, in fact, a pushing to the extremity of mathematical precision what is everywhere known as Grimm's Law — an aggrandizement of rough rules to ideal completeness. Thus he assumed that the words of the required language were always to be found somewhere latent in the words of the given language by those who had the art to uncover them, such art being furnished by the books aforesaid.

The creation of Sanskrit, the “refined” language, was a prodigious work on a grand scale. Grammarians and semanticists of genius undertook to create a perfect language, artificial and permanent, belonging to no one, that was to become the language of the entire culture. Sanskrit is built on a basis of Vedic and the Prakrits, but has a much more complex grammar, established according to a rigorous logic. It has an immense vocabulary and a very adaptable grammar, so that words can be grouped together to express any nuance of an idea, and verb forms can be found to cover any possibility of tense, such as future intentional in the past, present continuing into the future, and so on. Furthermore, Sanskrit possesses a wealth of abstract nouns, technical and philosophical terms unknown in any other language. Modern Indian scholars of Sanskrit culture have often remarked that many of the new concepts of nuclear physics or modern psychology are easy for them to grasp, since they correspond exactly to familiar notions of Sanskrit terminology.

Various taxonomies of season, landscape, times, gunas or qualities (and their material bases), tastes, characters, emotions, essences (rasas), etc., are basic to the thought-work of Hindu medicine and poetry, cooking and religion, erotics and magic. Each jati or class defines a context, a structure of relevance, a rule of permissible combinations, a frame of reference, a meta-communication of what is and can be done … Even the Kama-Sutra is literally a grammar of love, which declines and conjugates men and women as one would nouns and verbs in different genders, voices, moods and aspects. Genders are genres. Different body-types and character-types obey different rules, respond to different scents and beckonings.

Like everything metaphysical the harmony between thought and reality is to be found in the grammar of the language.

The universe was a language with a perfectly ambiguous grammar. Every physical event was an utterance that could be parsed in two entirely different ways, one causal and the other teleological.

There is in the rules or definitions (sutras) of Panini a remarkably subtle and penetrating account of Sanskrit grammar. The construction of sentences, compound nouns, and the like is explained through ordered rules operating on underlying structures in a manner strikingly similar in part to modes of modern theory. As might be imagined, this perceptive Indian grammatical work held great fascination for 20th-century theoretical linguists. A study of Indian logic in relation to Paninian grammar alongside AristotleAristotelian]] and Western logic in relation to Greek grammar and its successors could bring illuminating insights.

In general, there is no doubt that a theory of language, regarded as a hypothesis about the innate “language-forming capacity” of humans, should concern itself with both substantive and formal universals. But whereas substantive universals have been the traditional concern of general linguistic theory, investigations of the abstract conditions that must be satisfied by any generative grammar have been undertaken only quite recently. They seem to offer extremely rich and varied possibilities for study in all aspects of grammar.