sanAtana in samskrt means 'from old times'. Some people interpret it as same as 'nitya' which is not correct. Nitya means eternal and Sanatana means from old times. These two words have different meanings.
dharma means that is 'fixed' like laws of the nature. Laws of nature are fixed and beyond our control. For eg. things flow from high concentration to low concentration or energy moves from hot to cold are laws of nature that arise due to entropy. Hence giving from those who have to those who have not, which is in tune with one of the laws of nature is called dharma.
Living by sanAtana dharma means living by the laws of the nature that exist from old times.
mata means opinion. When that opinion gets strengthened, we get intoxicated by our opinion, it becomes 'madha'. Religions of the world from shaivism, vaishnavism, buddhism, jainism, christianity, islam and even hinduism are mata (ideas) or madha (intoxication).
varNa means paint or an external coating. jA-ti means that comes from birth or related by birth (as in family). varNa and jAti are antonyms or opposites. varNa is external. jAti is internal. Different families adopted different varNa to make a society, in the early days of civilization.
Unfortunately at some point of time varNa was forced on jAtis. The justification used was sanAtana meaning it comes from old times and so you must continue that way. That aggregation of jAtis into varNa developed into seggregation and that seggregation lead to some treated high and some low. At every step of this devolution, the justification was sanAtana, that it comes from old times.
For every practice in the society from stratification to untouchability to yajna to sati the intellectual answer was 'sanatana' which meant it comes from old times and hence we must continue that.
So sanAtana was the villain for mahavira, buddha, basava, ambedkar, periyar and a lot of people in between, because sanatana or 'coming from old times and hence continue' was a regressive answer that they revolted against.
But sanAtana dharma simply means living by laws of nature as from old times. Its roots were vedic scriptures and hence it was called vaidika dharma. It is opposed to living by a pre-fixed mata (opinion) or madha (intoxication). It is living by observation (drz), researching the vedic scriptures and introspection finding newer ideas. All matas and madhas were supposed to merge into the ocean of sanatana dharma. It propounded principles like vasudha-iva kutumbakam, sarve jana sukhino bhavantu, aham brahma asmi etc. It is a way to live life without being bound to a particular idea. It's living freely by questioning everything and introspection and seeking out your own contentment.
Shankara was not accepted by the people of his time. Mimamsakas said 'sanatana' mandates Yajna and the animal sacrifices in Yajna. But shankara opposed it and propagated vedanta. Ramanuja was not accepted by the people of his time. Sanatanis at that time said 'sanatana' mandates shudras cannot acquire jnAna. Ramanuja established vaishnavism as a mata for all. Basava was not accepted by sanatanis of his time. They said 'sanatana' mandates caste divisions and Basava cannot eradicate it.
Today shankara, ramanuja, basava are all seen as part of sanatana dharma. So many saints and seers who were opposed in their time in the name of sanatana (continue from old times) later became part of the sanatana dharma. That adaptation to changing circumstances and evolving new ideas is the sanatana dharma. How.?
Sanatana dharma is living by laws of nature (that exists from old times), one of which is adaptation to changing environments and evolving. As could be seen how the very saints and seers who were opposed by people in the name of 'sanatanam' in the past became the mascots of sanatana dharma in future, adaptation to new ideas and thought processes to continuously evolve us towards our own fulfillment or contentment (as said by mahAperiyavA in a discourse) is the true nature of sanatana dharma.
But this is neither understood by people who oppose it nor by people who uphold it. Both of them think sanatana dharma means just continue something from old times because it comes from old times. But that's not sanatana dharma.
The beauty of Sanatana dharma is people who opposed or wanted to eradicate sanatanam have contributed a great lot to sanatana dharma by adapting its very nature to changing environments and times. Often people who upheld sanatanam have actually impeded its evolving nature, but in that process, ensured that their opposition leads to an evolution of dharma and not a revolution that throws the baby along with bathwater.
That's the beauty of sanatana dharma where detractors and supporters together contribute to its evolution. So all detraction and opposition and want to eradicate sanatanam is welcome, as it actually helps in evolving the sanatana dharma.
The alternate path of sanatana dharma (which is questioning, introspection and adaptation to new ideas) is living by a pre-fixed mata (idea) or madha (intoxication). Even living as a na-astika (non-believers) is living by a 'mata' or opinion, if its not continuously questioned and introspected often. So the real rational way of living is sanatana dharmic way of living. Since this is more in tune with modern thought process, sanatana dharma would survive the faith based systems for quite sometime to come.