Niyam, fixed observance: a life that has a discipline, a life that has regularity about it. Because unless there is regularity in life, a discipline, we will be a slave of our instincts. That is not freedom. Only a person who has regularity about him can become the master someday.
Now the various subcomponents of Niyam.
First is "purity," shauch. Means purity on 3 fronts - food, body and mind One has to watch one's food. Whatsoever you eat, it is no ordinary matter. You should be careful because your body is constituted of whatsoever you have eaten in the past. Be careful what you eat, be careful what you drink -- be careful how you keep and care for your body. Small things do matter. For an ordinary man they don't matter because he is not going anywhere. Once you start on the spiritual path, everything matters; even the slightest disturbance matters. It is like if you are driving a car to work vis a vis driving on an F-1 track. On the F- 1 track everything matters -J. Food – vegetarian food that is light on the system and fresh. Body can be purified by drinking lots of water, eating healthy and exercising regularly. And mind can be purified through meditation.
The second step of niyam is "contentment," santosh. Contentment means: whatsoever is, is beautiful, the feeling that whatsoever is, is the best that can be. A feeling of deep acceptance is santosh, contentment, a feeling of saying yes to the whole existence -- as it is. Or in other words not being cynical of things, not being negative and stop complaining all the time. Remember that contentment is not consolation. When we console ourselves we are not contented. In fact, there is a very deep discontent inside -- but seeing that discontent creates worry, seeing that discontent creates anxiety, seeing that discontent leads nowhere, so logically, we persuade ourselves that "this is not the way." Finding that you cannot reach, do not rationalize that the goal is not worth reaching. Contentment is a positive state of being; consolation is suppression.
After contentment, is "austerity," tapa. One can be austere before contentment but then the austerity will be through desire. When a person is content then austerity is not a means; it is just a simple, beautiful way of living. Then it is not a question of having a few things or more -- that is not the problem then. Austerity is simplicity: to live a simple life. What is a simple life? It is like that of a child -- enjoy everything, but don't cling. As LDV said “"Simplicity is the ultimate sophistication."
And then comes "self-study," swadhyaya. A man who has attained to purity, contentment, austerity, only he can study self because now all the garbage is thrown. If there is too much garbage (judgments, prejudices, grudges etc) in the person self cannot be studied, as it will not be self-study, because first all that rubbish will have to be studied. These are very logical steps. After austerity, when you have become very simple, no rubbish accumulates, when you have become so contented, when you have become so innocent and pure, you have become like fragrance, weightless, on the wings, in the air, riding on the air -- then self-study. Now, you can study the self.
The last step in the second stage i.e. surrender to Divine." When you have studied the self, only then can you surrender. Because what will you surrender otherwise? The self is to be surrendered. If you know it well, only then you can surrender. Otherwise how will you surrender?
"Purity, contentment, austerity, self-study, and surrender are the laws to be observed." These are laws for growth. They do not prohibit; they help. They are not restrictive; they are creative.