Sukla Sen: Email -- the term entered into the popular vocabulary only with the rise of (revivalist reformist) Arya Samaj movement -- mainly in the Punjab region...
The traditionalists, opposed to "reforms" (of any sort), coined the term to distinguish themselves from the Arya Samajis. They branded themselves as "Sanatani" Hindu. The earlier (modernist reformist) Brahno Samaj movement initiated by Rammohan Roy..

References complied by S Sen..

The concept of Sanatan Dharma: its roots and the historical context of its use https://indianexpress.com/article/explained/explained-history/sanatan-dharm-meaning-history-8924036/ Mythologist and author Devdutt Pattanaik posted  that the word “sanatan”, meaning eternal, does not appear in the Vedas. “The word sanatan started being used in the Bhagavad Gita, and refers to knowledge of the soul, which is eternal.. Zavos in his article the Punjab Census Report of 1891,  (said) it is not as if each of the sabhas promoting Sanatan Dharma had a common doctrine that distinguished them as orthodox...“Sanatanis (then) refuting the arguments of Dayanand and other reformers as they arose,”

What is Sanatan Dharma? https://www.deccanherald.com/india/explained-what-is-sanatan-dharma-2674213   Amit Vasudev .. In his book, Hindus: Their Religious Beliefs and Practices, Julius J Lipner says, "the term ‘Sanatan Dharma’ was used in the Bhagwat Gita by Arjuna, when he told Krishna that 'when the clan is vitiated, the sanatan-dharmas of the clan are destroyed'.... In his book, Revolution and Counter Revolution in Ancient India, Dr BR Ambedkar very unabashedly puts, "The history of India is a history of mortal conflict between Buddhism and Brahmanism"...Caste system remains a sticky issue in the Hindu religion which is unlikely to die anytime soon.

Sanatan Dharma: Its roots and the historical context of its use  https://timesofindia.indiatimes.com/life-style/soul-search/sanatan-dharma-its-roots-and-the-historical-context-of-its-use/articleshow/103608346.cms Resham Sengar  Sanatan Dharma is a way of life practiced to break the web of Maya or cosmic illusion. It is Maya that plants the desire to acquire objects of the world.... The ancient shruti and veda state that there is only ONE God or force and He is present in all the tangible and visible objects in the Universe.

https://www.britannica.com/topic/sanatana-dharma denote the “eternal” or absolute set of duties or religiously ordained practices incumbent upon all Hindus, regardless of class, caste, or sect. Sanatana dharma is contrasted with svadharma, one’s “own duty” or the particular duties enjoined upon an individual according to his or her class or caste and stage of life. The potential for conflict between the two types of dharma (e.g., between the particular duties of a warrior and the general injunction to practice non-injury) is addressed in Hindu texts such as the Bhagavad Gītā, where it is said that in such cases svadharma must prevail.

A Reaction against Reform https://indianexpress.com/article/opinion/columns/sanatan-dharma-sabha-caste-hierarchy-hindu-reform-dalits-purification-8957653/ Christophe Jaffrelot writes: How Sanatan Dharma was used to defend caste, combat Hindu reform 

Full Text of S Sen's post:

Despite all mumbo jumbo that's being mouthed and a few stray appearances of "Sanatan Dharma" in sacred Indic texts here and there -- with significantly different connotations -- the term entered into the popular vocabulary only with the rise of (revivalist reformist) Arya Samaj movement -- mainly in the Punjab region.
The traditionalists, opposed to "reforms" (of any sort), coined the term to distinguish themselves from the Arya Samajis. They branded themselves as "Sanatani" Hindu.
The earlier (modernist reformist) Brahno Samaj movement initiated by Rammohan Roy, despite being bitterly opposed by the traditionalists in the then Bengal didn't see any rise of the "Sanatanis". There was no organised response. The plausible reason is that while the Brahmo Samaj had/has among its followers, apart from the polyglot Roy himself, Tagore, Jagadish Chandra Bose, C R Das, Bidhan Chandra Roy, P C Mahalanobis, Satyajit Ray, Amartya Sen et al, its social reach -- with its somewhat ethereal ways --
was far more limited. So the threat perception was also accordingly quite limited.

Only recently, the Hindutvavadis have picked up the term giving it a fresh
twist.
For them (all) Hindus are Sanatanis. Hinduism -- actually a gradually consolidating and homogenising, rather wide, basket of somewhat loosely connected heterogeneous traditions -- is eternal. It exists from time immemorial and is unassailable.
It's, however, now almost universally accepted that the tag "Hindu", which appears nowhere in the sacred texts, was coined by aliens -- speakers of a foreign tongue -- coming from across the Sindhu River, maybe (only) some two thousand and six hundred years back.
So, in one stroke that (perceived) ignominy is just shaken off. It also helps in the drive to impose a "standard" form of Hinduism -- ironically in the image of hated Abrahamic religions -- on all those calling themselves "Hindu".

 

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