The principle that states living species are descended from ancient ones is called evolution. And the key phrase that describes how this happens is descent with modification.

Here's why:

* Evolution is the gradual process of change in the inherited traits of a population over successive generations.

* Descent with modification highlights the key mechanism driving evolution. It means that offspring inherit traits from their parents, but these traits can be slightly modified over time due to various factors like mutations, natural selection, and genetic drift.

So, the full principle is evolution by descent with modification. It's a powerful concept that explains the incredible diversity of life on Earth.