Once there was a sage called Varsa. He had two disciples, Katyayana and Panini. While Katyayana was very sharp, Panini was a blockhead. Worried by this ill-luck, Panini left his gurukula and went far away into the Himalayas. There he practiced sacrament in order to please Lord Siva. Satisfied with his austere penance, Lord Shiva emerged before him and granted him the bonus of intellect. Then God performed holy dance in his ecstasy and gave birth to fourteen holy Sutras – ‘aphorism’ – by beating his drum fourteen times. Blessed with astuteness, Panini accepted them and returned home. Then he composed a grammar of Sanskrit language which became the first and the most perfect grammar that could ever be composed.

In accumulation to such mythological version about Panini’s life as described above which articulates the greatness of his grammar and his gratitude to Lord Siva due to whom his insipidness was transformed into a intellect, a few more tales are found recorded in the accounts of ancient Chinese pilgrim, Huan Tsang . Huan Tsang has recorded a few stories about Panini which were popular in the North-west region of India during his period (A.D. 602 – A.D. 644).

When Huan Tsang reached a place called So-lo-lu he found that it was a place where sage Panini who composed his Chingminglun (grammar) was born. He was told that since his childhood Panini was well-versed about the linguistic behavior of the people around him. He wanted to improve the earlier organism of grammar which was formless and false. He wandered in search for guidance in this regard. In one of his sojourns he met Isvara Deva and consulted him on the matter of establishing reforms into the existing grammar. Isvara Deva gave him proper advice and assured all help. Thus after having met a Guru, Panini returned home.

After unremitting hard work Panini composed a book of letter which contained 1000 slokas. This book was a result of his pains-taking, laborious efforts by collecting information from people who spoke the language. It enclosed everything that could ever be known about language and communication. Panini then presented his work to the ruler who was greatly impressed by the work. The ruler then issued an edict throughout his kingdom that Panini’s grammar should be studied and taught in every school. The ruler in supplementary announced a reward of 1000 pieces of gold for him who studied Panini’s work from the beginning to the end. Since then the work had been handed down by masters of great competency to the next legion.

In addition to this sequence about Panini’s great recognition told by Hsuan Tsang in his Records, we get an account in his biography of how Huan Tsang studied Sanskrit. Here it is told that Huan Tsang studied Sanskrit grammar at Nalanda. Panini received the Sanskrit grammar from Sakra who had received it from Brahma and Panini reduced the size of Sakra’s grammar which contained 10,000 slokas to 8000 slokas. A detailed description of his grammar as containing inflexion, subanta, tinanta, atmanepada etc is also given in the biography.

Panini was an ancient Indian grammarian from Gandhara in 4th century BC. He is known for his Sanskrit grammar, predominantly for his formulation of the 3,959 rules of Sanskrit morphology in the grammar known as Ashtadhyayi which means “eight chapters". It is a foundational text of the grammatical branch of the Vedanga. The Ashtadhyayi is the most primitive known grammar of Sanskrit, and the earliest known work on explanatory linguistics, generative linguistics, and together with the works of his immediate predecessors like Nirukta, Nighantu, Pratishakyas, stands at the beginning of the history of linguistics. Panini's inclusive and technical hypothesis of grammar is conservatively taken to mark the end of the period of Vedic Sanskrit by introducing Classical Sanskrit. Panini's grammar defines Classical Sanskrit, which signifies that Panini lived at the end of the Vedic period. He notes a few special rules, marked chandasi , which means “in the hymns", to account for forms in the Vedic scriptures that had been out of use in the spoken language of his time, indicating that Vedic Sanskrit was already outmoded, but it was still a graspable vernacular.

Panini’s grammar has influenced modern linguistics to a great extent. Panini, and the later Indian linguist Bhartrihari, had a significant influence on many of the foundational ideas proposed by Ferdinand de Saussure, professor of Sanskrit, who is widely considered as the father of modern structural linguistics.

Noam Chomsky has always acknowledged his debt to Panini for his modern notion of an explicit generative grammar. In Optimality Theory, the hypothesis about the relation between specific and general constraints is known as Panini's Theorem on Constraint Ranking. Paninian grammar has also been devised for non-Sanskrit languages. His work was the forerunner to modern formal language theory – mathematical linguistics – and formal grammar, and a precursor to computing.

Panini's use of meta-rules, transformations, and recursion together make his grammar rigorous and modern.

We should not be oblivious to the historical facts reflected in some stories too . Some historians believe that Panini was a reformist and he did not compile a totally new grammar but revised the earlier grammar traditionally handed down to him mainly from the point of view of bringing exactitude and flawlessness. Even a perfunctory glance at his grammar is enough to prove these facts. Similarly, we should not be taken aback if Panini was worshipped as a deity and statutes were erected in his memory during ancient period, because any casual reader of Sanskrit literature can feel the influence of Panini and his grammar throughout the literature in modern times. It has been correctly acknowledged by tradition that the Sanskrit language that nurtured the classical Sanskrit literature owes its wholesomeness and excellence to Panini’s grammar.

Most conceivably, Panini followed an oral tradition in his creative work. It is not sure whether Panini used writing for the symphony of his work, though it is commonly approved that he did use a form of writing, based on references to words such as "script" and "scribe" in his Ashtadhyayi.  It is assumed that a work of such density would have been very difficult to compile without written notes, though some have argued that he might have composed it with the help of a group of students whose memories served him as 'notepads'—which you may find quite interesting, isn’t it? Writing first reappears in India with the Indus script in the form of the Brâhmî script in the 6th century BC, though there are early instances of script which originate from Tamil Nadu in southern India, quite distant from Gandhara in northwestern India.

In the absence of any tangible substantiation, nothing clear-cut is known about Panini's life, not even the century he lived in. Scholarly mainstream prefers to claim that he was born in a 4th century BC in Achaemenid Gandhara with Pushkalavati as its capital, contemporary to the Nanda Dynasty ruling the Indo-Gangetic plain, but a 5th or even late 6th century BC date cannot be also ignored.  According to legend, he was born in Shalatula, a town beside the Indus River, in Gandhara, which is in the modern day the Attock District of Pakistan's Punjab province, located between Rawalpindi and Peshawar.

Even if custom does not endow us with any other detail about Panini’s life and family, a tale woven around a reference in Panini to a verse is told that he met with a tragic death when he was attacked by a lion while he was deeply reflecting over the last Sutra of his grammar. This story clearly mentions the character of the great grammarian who was constantly engrossed in the thought about language and grammar to the extent of being totally forgetful about the surroundings.