This essay tries to explain some ethnic phenomena with concepts of Niklas Luhmann's systems theory. The theoretical assumption is that the categorization principles of human groups transform with the fundamental structures of societies. In modern society, which is constructed on the basis of functional differentiation, the classification types, including class, nation, race, and ethnic group, merely refer to semantics instead of a way to categorize the actual people essentially. That is, in this classification, the characters of specific groups are involved in the process of communication. The emergence of ethnicity is contingent on the distinction adopted by the observer. Moreover, the ethnic semantics is related to the inequality issues in modern society, which can be observed on two levels. The first level of inequality is concerned with the inclusion/exclusion conditions of access to communications in functional systems. The second level of inequality is related to the probability of positive value/negative value in the self-observation of systems. Ethnicity is therefore a group-semantics which describes the formation and the character of a group of people treated unequally in the society, and the group character given by self-description in the communications.