Which of the following is NOT true about the term 'jati'?

Both 1 and 2

In Brahmanical theory, jati, like Varna, was based on birth. However, while the number of varnas was fixed at four, there was no restriction on the number of jatis. In fact, whenever Brahmanical authorities encountered new groups – for instance, people living in forests such as the cicadas – or wanted to assign a name to occupational categories such as the goldsmith or, which did not easily fit into the fourfold Varna system, they classified them as a jati. Jatis which shared a common occupation or profession were sometimes organised into shrenis or guilds