Stereotypes are generalizations, or assumptions that people make about the characteristics of all members of a group based on an image (often wrong) about what people in that group are like.
If you assume you know what a person is like, and don't look at each person as an individual, you are likely to make errors in your estimates of a person's character.
In conflicts, people tend to develop overly-negative images of the other side. The opponent is expected to be aggressive, self-serving, and deceitful, for example, while people view themselves in completely positive ways. These stereotypes tend to be self-perpetuating. If one side assumes the other side is deceitful and aggressive, they will tend to respond in a similar way. The opponent will then develop a similar image of the first party, and the negative stereotypes will be confirmed. They may be grow worse, as communication is shut down and escalation heightens emotions and tension