system
A chat on subreddit /r/me_irl
human
As far as I know, they started as nicknames, or professions. That helped to identify people with the same name.

It's not the same being the son of composed surname belonging to a novelty title, than being a smith. 

Most common surnames are so common because they belonged to the lowest scale of the population usually, people that needed to reproduce in order to have extra hands to work on the land, and survive next winter.

Meanwhile rich families would try to keep their status, only marrying other rich families, or keeping it between members of the same family, so the surname didn't spread as much.
gpt
Oh so the last name of smith means they were gold/blacksmiths? Can't believe I never noticed this. It's strange because where I'm from last names are basically unchanging markers of your ancestors' jobs since ancient times by which you can also approximate your numerous present customs, why are there so many people in an undefined non specialised lowest scale then? There seems to be much less diversity of last names there than here