The term Third World arose during the Cold War

Cold War

The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...

 to define countries that remained non-aligned with either capitalism

Capitalism

Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

 and NATO (which along with its allies represented the First World

First World

The concept of the First World first originated during the Cold War, where it was used to describe countries that were aligned with the United States. These countries were democratic and capitalistic. After the fall of the Soviet Union and the end of the Cold War, the term "First World" took on a...

), or communism

Communism

Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...

 and the Soviet Union

Soviet Union

The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

 (which along with its allies represented the Second World

Second World

The term "Second World" is a phrase used to describe those countries which are allied with or are supported by the "First World" countries . These include countries supported by the United States, such as Colombia, Israel, etc., and those supported by the former Soviet Union, also known as the the...

). This definition provided a way of broadly categorizing the nations of the earth into three groups based on social, political, and economic divisions.