When a diamond rough is discovered, it eventually makes it way to a Polishing factory where it is cut down, shaped, and polished. The size of the finished diamond will depend entirely on what the size of the rough is. Most of the weight is lost when cutting and polishing down the stone and obviously the larger the rough is when started the larger the finished product will be when finished.
Similar to anything else in the world, once complete the retailer needs to understand their product and know what they have in order to make the sale. Being that there were no precise electronic gadgets at the time, people would depend on precision scales to weigh the goods.
Carob seeds were used on precision scales as weights against small quantities of many precious stones including Yellow, Pink, and Red diamonds. Tradition continued to custom and today, even though the scales are far more precise, diamond weight is still described as carat weight.
The word carat is derived from the Greek word 'keration,' meaning fruit of the carob, which is where the seeds are from. The Carob tree is native to the Mediterranean region. The weight of an average carob seed is approximately 200 milligrams. Therefore, the weight of one carat is precisely 200 milligrams, or 0.2 grams.
Read more about diamond carat weight.