It's to do with an old French sizing system I believe and something to do with rim widths, where the A-D suffix represented the rim width ie 700A being narrow, 700D being wide.
It was tyre widths rather than rim widths. "A" was about 29mm, "B" was about 33mm, "C" was about 39mm, and "D" was about 56mm (?).
So a 700c rim was for a 39mm (ish) tyre that was 700mm in outside diameter, and a 650B rim was for a 33mm tyre with a 650mm outside diameter.
It wasn't that long before non-standard tyres were produced, so a 700Cx32 tyre is a 32mm tyre that fits on a rim made for a 700mm size C tyre. You have the same in imperial measure, with 27" x 1 1/4" x 1 1/8" being a 1 1/8" wide tyre that fits on a rim made for a 27", 1 1/4" wide tyre.