Quite simply, an appellation is a legally defined and protected geographic area used to identify where the grapes in a wine are grown.
So in California, for example, if a bottle says “Coombsville” or “Napa Valley” then at least 85% of the fruit must come from the stated area. If the label says “California” then the grapes are likely sourced from several areas within the state.
Other restrictions may be placed on an appellation as well, such as the types of grapes grown, maximum yields and/or alcohol levels.
Every wine region worth its salt has some sort of appellation system, typically established and overseen by a national board. These regulations vary from country to country, ranging from very strict to fairly loose. While the different classifications of wine can be used as a way to gauge quality (a French grand cru, for example, is generally thought to be better than a vin de table) they are by no means a guarantee.
The French are generally considered to have created the first modern appellation system in 1935, and it became the model for most wine growing countries that later created their own such systems.
However, the notion of geographic distinctions for wine dates to the Bible, a practice that continued into the middle ages. In the 1500s, for example, winemakers from Rioja branded the goat skins carrying their wine to assure its provenance.
The first protected vineyard zone was created for Chianti in 1716, and the first wine classification system was created in 1730 for Hungary’s esteemed Tokaji wines.