Source: http://tipitaka.net/pali/companion/

The Pali Companion

Pali, the language of the Buddhist canonical writings, is the oldest literary Prakrit.

The Language Tree

1. Pali is one of the many vernacular dialects derived from Sanskrit called Prakrits.  Prakrits are known to be used since the 3rd century BC (Middle Indo-Aryan period).

2. The development of Indo-Aryan languages is generally divided into three stages as follows:

Old Indo-Aryan (3rd century BC and before)
Middle Indo-Aryan (from about 3rd century BC),  and
Modern Indo-Aryan (from about 10th century AD).

3. The Old Indo-Aryan period comprises

Vedic Sanskrit (used in Vedas, Brahmanas and Upanishads) and
classical Sanskrit (used in Mahabharata, Ramayana and Puranas). However,
contemporary Sanskrit and Buddhist Hybrid Sanskrit (used in Mahayana texts) are later developments during the Middle Indo-Aryan period.
FamilySub-FamilyBranchGroupLanguage
Indo-EuropeanGermanicWest GermanicAnglo-FrisianEnglish**
Netherlandic-GermanGerman
ItalicLatin-Faliscan(Latinian) Latin*
RomanceSpanish, Portuguese, French
SlavicEast SlavicRussian
GreekGreek*
Indo-IranianIndo-Aryan(Indic)Old Indo-AryanSanskrit*
Middle Indo-AryanPali*
Modern Indo-AryanHindi, Bengali, Sinhalese
Afro-Asiatic (Hamito-Semitic)SemiticNorth CentralHebrew*
South CentralArabic*
Sino-TibetanChinese (Sinitic)Mandarin Chinese**
Tibeto-BurmanBurmese, Tibetan
JapaneseJapanese
KoreanKorean
Austro-AsiaticMon-Khmer Khmer
Viet-MuongVietnamese
AltaicMongolianMongolian
TaiThai, Lao
AustronesianMalayo-PolynesianWestern Malayo-PolynesianMalay** (Malaysia, Indonesia)
DravidianTamil**
* Languages used in major religious texts:
- Pali: Theravada Tipitaka (Buddhism)
- Sanskrit: Vedas (Hinduism), Mahayana Texts (Buddhism)
- Hebrew: Old Testament (Judaism, Christianity)
- Latin: New Testament (Christianity)
- Greek: New Testament (Christianity)
- Arabic: Koran (Islam)

** Four official languages of Singapore.

table 1: A Simplified tree of World Languages

To learn more about languages, please refer to Article on "Language" (Encarta Encyclopedia) and the Ethnologue at http://www.sil.org/ethnologue/.