Earlier quoted context omitted.
'Stereotyping' is just a way to extrapolate past experiences, of yourself or of others, into future situations to make reasonable assumptions about those situations. If it's customary for Indians to be late, it's perfectly reasonable for me to assume you'll be late on an appointment if I don't know anything about you. Once I get to know you, and notice that you're always on time, I will adjust my expectations of appo…
According to OS X's dashboard dictionary widget (Oxford American?) Stereotype: a widely held but fixed and oversimplified image or idea of a particular type of person or thing. That "oversimplified" is what makes it an unreasonable assumption.
My point was coming from a slightly different notion of 'stereotype' where it's more similar to 'preconceived notion'. Maybe it's just a language thing.