Why does a 1st grader know what "popular" is?

My youngest daughter Jellybean started first grade this year. She had an awesome kindergarten year and made lots of new friends. Last summer, I was talking to her best friend's mom about 1st grade and teacher choices. Kara hoped that Jellybean was in the same class as her daughter because the other kids in her neighborhood won't play with her daughter at school if they aren't in the same class. They will tell her kids point blank that "you are not in my class, so I'm not playing with you." Kara complained to the other moms. They responded by saying that was just how it was. I was kind of in shock over this.

So now we are halfway through 1st grade. I will ask Jellybean about friends from last year, and she will tell me that they hang out with the popular kids. These comments do not make me want to run out and buy the coolest new clothes for my daughter so she can be popular too. These comments make me mad. My 1st grader should not have to deal with popularity. She is seven! There should not be cliques in elementary school. Why is it this way? My older daughters did not have this - so it seems to be centered around a certain group of moms and their neurotic desire to make their child popular. I have to wonder how this can happen at such an early age.

I try to teach my kids that what is important is how you treat other people. That what is inside is what matters. That clothes don't make you a good person. But when we deal with popularity at age seven, what hope do I have to make them understand?