Factual error: The movie is set in Rwanda in 1994. At the start of the movie you see a billboard advert for MTN, a South African cellular service provider that was not available in Rwanda in 1994.
Factual error: When the mini bus drops off the priest at the hotel, you see a yellow triangular sticker on the side window. This is an ARMSTA sticker. This means the taxi belongs to the "Alexandra Randburg Midrand Taxi Association" in Johannesbug, South Africa. Yet the movie is set in Rwanda.
Answer: Generally there were two methods, one they had identification badges that mentioned whether they were Tutsi or Hutu. This is evident when Don Cheadle goes to buy supplies and they want to see some ID. The other was simply that people knew each other. Some people would say who was Tutsi and who was Hutu.