Final answer:
The belief that all students from Othertown High School share the same negative traits is an example of stereotyping, which hinders critical thinking and fails to recognize individual differences.
Step-by-step explanation:
The belief that all students at Othertown High School are spoiled, overindulged, and cheaters is an example of stereotyping. Stereotyping involves making oversimplified or generalized assumptions about a group of people. In this case, the assumption that all students from a specific school possess the same negative traits does not account for individual differences and complexity among people within that group.
Prejudices and stereotypes can be detrimental to social relations and the development of critical thinking skills because they prevent individuals from examining their own beliefs and understanding the diverse nature of the human experience. Therefore, it's essential to recognize and question such beliefs, ensuring they are based on evidence and not on unfounded generalizations.