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Dharma (Sanskrit) or Dhamma (Pāli) in Buddhism can be taken to mean the same, and as having two primary meanings: the teachings of the Buddha which lead to enlightenment, and the constituent factors of the experienced world. But to me Dhamma (Pāli) is “Suddhamma” and refers only to the teachings of the Supreme Buddha. Whereas Dharma is regarded variably by different traditions, and generally regarded as an ultimate and transcendent truth which is utterly beyond worldly things.
The Importance of learning PALI Language, and using the Pali words is mainly because today Buddhism is many things to many people, mostly laden with rites, rituals, icon worship, so-called collection and transference of merit etc. - things the Buddha clearly rejected as non-Dhamma. To study SudDhamma, it is important that we learn Pali, at least to some degree as all translations are hazardous. The Dhamma (as opposed to Dharma) is found only in the Teaching that were taught by the Buddha himself - Suttas and connected texts such as the Sutta Nipâta, Dhammapada, Udâna, Itivuttaka, and Thérathéri Gâthâ. [I here refer only to Théravâda Buddhist Text].
To make my point clear may I mention here the statement “Vidya Dadati Vinayam” - this is written not in Pali, but in Sanskrit. Therefore, it has no connection with Buddhism, as we think. Secondly, it was not the Buddha who stated that learning gives discipline, but the brahmins who maintained their authority through the means of education. What Buddhism reiterates is exactly the opposite of this. What is repeatedly stated in the Pali Canon is that discipline should be achieved before learning. The motto of Buddhism is “first discipline, second learning”.
But again if we take later text such as “Milinda Panha”, it was originally a Sanskrit Buddhist text. For those who do not know what I am coming to…. King Menander I (Milindu/ Milinda in Pali language) was a powerful Indo-Greek monarch who ruled “Sagalapura” in historical India (Now Sialkot in North-east of Panjab province in Pakistan at the foot of the Kashmir hills near the Chenab river), somewhere in the 150 BCE.
King Milindu learnt dhamma from Arahanth Nagasena - with his famous questions and Arahanth Nagasena successfully answering all of them which led the king to ordain under the Arahanth abdicating his throne and later, attained Nirvana (Nibbana). The questions of King Milindu and the answers given to them by Arahanth Nagasena are recorded in the “Milinda Panha”, probably written in Sanskrit at the beginning and later translated to Pali. Today, there are many translations of the book in different languages.
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It is important to note that the Buddha taught in Magadhi, a dialect of the eastern-UP region; however much later his teachings were written down in Pali. The Buddha specifically did not teach in Sanskrit because it was the language associated with the brahmins, the high-caste priests. And it is very important to note that a lot of the Buddha's teachings were a response to brahminical ideology, so he deliberately did not want to teach in Sanskrit. Also, Magadhi was more vernacular than Sanskrit.
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Dhamma is the pali version of the word- In the time of Buddha , there was a conscious decision to record the teachings in Pali rather than Sanskrit. As sanskrit was not accessible to all and created a division between those who has access to it and who were interested in higher knowledge, but Pali was a common tongue in the region.
But it is to be understood that Dharma(be it sanskrit or pali) in the context of Buddhism means much more than mere Duties as the common usage in Sanskrit means. Dhamma is the very body of Buddhas teachings which is said to be universal in truth.