The institution known as "school" isn't just a facility for doing classwork. It's essentially a microcosm of society, all of humanity put together in a little diorama. Bully exists in schools because war and conflict exist in the world, and school castes reflect our stratified, hierarchical society. Living in a democracy, the tyranny of the majority naturally applies at school, too. The majority -- that is to say, the people with the most friends -- are superior.