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The Muṇḍaka Upanishad is one of the older, "primary" (mukhya) Upanishads commented upon by Shankara. It is associated with the Atharvaveda. It figures as number 5 in the Muktika canon of 108 Upanishads.
It is a Mantra-upanishad, i.e. it has the form of a Mantra. But, as the commentators observe, though it is written in verse, it is not, like other Mantras, to be used for sacrificial purposes. Its only object is to teach the highest knowledge, the knowledge of Brahman, which cannot be obtained either by sacrifices or by worship (Upasana), but by such teaching only as is imparted in the Upanishad. With its beautiful style, lucid metres, serious wording, and lofty feelings each mantra of this Upanishad gives joyous reading. It might have derived its name from the word "Munda" meaning "Shaven Head". The assumption is that if the principle thought of this Upanishad is understood, the illusions of material world will be cut like hairs in the process of shaving; or because mostly monks are audience for its teachings, and since usually Hindu monks will have a shaven head, this name might have something to do with that background. It is the first text to mention the six disciplines of Vedanga.
It has three chapters and each chapter is divided into sub chapters which are called "Khanda". In total this Upanishad has 64 Mantras.
Traditional Origin of the Upanishad
As described in the beginning of this upanishad, it is said to be first told by Brahma to his son Atharva and Atharva taught it to Satyavaha and Satyavaha passed it to Angiras who in turn passes the knowledge to Shaunaka, dialogue between the two forms the content of this Upanishad.
This Upanishad divides all knowledge into two categories. The knowledge that leads to Self Realization is called Para Vidya (Great or Divine Knowledge) and everything else is called Apara Vidya or Knowledge of Material world (wordly knowledge). Shaunaka approaches sage Angiras and asks "Revered Sir, by knowing what everything will be known ?" Angiras replies that Two knowledges should be known, one is Para Vidya and other is Apara Vidya. Knowledge of worldly things is Apara Vidya and that by which Eternal Truth or Akshara is obtained is Para Vidya. Though Apara Vidya enables one to earn ones bread and helps one to understand each object of universe separately, it does not show the Ultimate Reality (Akshara) or Root Cause of this universe. While Para vidya doesn't teach objects of this universe but enables one to understand underlying fabric of it. Like by knowing gold all the gold ornaments could be known, by knowing Akshara, its another manifestation, the universe is known. This Upanishad expounds the greatness of Para Vidya.
Another important feature of this upanishad is its lauding of Sarva Karma Sannyasa or Renouncement of All Action. Thus encourages the opinion that monkhood is good way for attaining self realization. verses 1.2.11, 3.2.6 and 3.2.3 aptly support this view. It teaches that one may be good Yogi and could have attained yogic powers, or could have been a person doing charities and public welfare, or a learned intellectual man but by all these, illusion of world would not disappear in that person. To attain ultimate salvation (Moksha), knowledge of supreme reality attained through practice of monk hood is essential. It also teaches that desires cause rebirth in the world and one who renounced all desires (by taking Sannyasa), all desires end in this life itself, thus implying that there is no rebirth to such person (verse 3.2.2).
Another feature of this Upanishad is the Yoga prescribed for attaining Self Realization. This spiritual practice has been described beautifully using a bow-arrow simile.
A seeker of The Truth should take the Mantra Aum or Pranava told in Upanishad's as bow, The seeker's Self purified by Upasana is arrow, Supreme Reality or Brahman is target. By pulling back the senses from their sensual interests, should meditate and become as much concentrated like an arrow in flight, and hit the target Brahman. (refer verse 2.2.4).
Mundaka Upanishad also tells the way in which the self realized souls enter supreme reality or Godhead (Brahman) and their state afterwards. It says they Enter Everything (3.2.5). Just like when pot is broken, the small space inside the pot becomes one with great space outside; cause for the individual identity or separateness would disappear. During Moksha, elements building body and mind go back to their sources and self becomes one with overself just like rivers lose their name and form once they enter ocean (3.2.7 and 3.2.8).
Since the whole teaching is the conversation between Shaunaka and Angiras, the Upanishad ends with saluting Angiras with deep gratitude.