The term carat is used as both a unit of mass -- especially for gemstones -- and as a measure of purity for gold. In the United States and Canada these terms are spelled differently -- as carat and karat respectively -- to avoid confusion. But many people get them confused anyway.
The term carat originates from the Greek keration for "fruit of the carob". Carob seeds were used for precision weighing of gold and gemstones, since it was thought that carob seeds had a uniform weight. The modern carat, known as the metric carat, was adopted in 1907, defined as a weight of 200 mg. This is actually very close to the mass of larger carob seeds. One carat can be divided into 100 points, a measurement often used in the diamond trade.
Interestingly, the term karat also derives from the name of the carob seed. So how did they get from the weight of the carob seed to the purity of gold? And why is pure gold defined as "24 karat"? A precise answer is not easy to find, but the connection appears to derive from the Roman Emperor Constantine, who introduced a gold coin that weighed exactly 24 carob seeds.
Under the karat system of fineness of gold, pure gold is 24 karat or 24k, 18k is 75% pure and 12k gold is 50% pure. This system is gradually giving way to the millesimal finess system which expresses purity in terms of parts per thousands of the alloy. Thus 22k gold is marked as "916" under this system, or 91.6% gold. It is certainly a simpler and less confusing method.
Fortunately for the gemstone industry, nearly the entire world has standardized on the carat as the measurement of weight for gemstones. We do occasionally get requests for gemstones measured in rattis, an Indian measurement where 1 standard ratti is 182 mg. But the main confusion any gem dealer encounters with carats is the inexperienced buyer who thinks of the carat as a size measurement. Different varieties of gemstones differ considerably in their density or specific gravity, and different cuts also effect how large a gemstone appears when viewed face up. Always check the dimensions in millimeters when you're buying a gemstone and don't rely on the carat weight alone.