Short answers, pulled from the story.
Alfred Sauvy published an article in the French magazine L'Observateur on the 14th of August 1952. He used the phrase third world to describe countries playing a small role in international trade and business.
The United States, Canada, Japan, South Korea, Turkey, the Southern Cone, and Western European countries formed the First World. These nations represented the capitalist bloc aligned against communist powers.
Mao Zedong developed the Three Worlds Theory following the Sino-Soviet Split and placed both China and India within the Third World he defined as consisting of exploited nations. Vice-Premier Deng Xiaoping pronounced this theory at the UN General Assembly in 1974.
Since 1990 the term evolved to denote countries with less economic development. It is increasingly perceived as politically incorrect or outdated in modern geopolitics.
Sauvy drew his inspiration from the Third Estate of pre-revolutionary France because that group represented commoners who opposed the clergy and nobles during the Estates General. He stated that this third world was ignored, exploited, and despised like its historical namesake.