1807, of or pertaining to the Caucasus Mountains (q.v.), with -ian. Applied to the "white" race 1795 (in Latin) by German anthropologist Johann Friedrich Blumenbach (1752-1840), who in his pioneering treatise on anthropology distinguished mankind into five races: Mongolian, Ethiopian, Malay, (Native) American, and Caucasian. In the latter group he included nearly all Europeans (except Lapps and Finns), Armenians, Persians, and Hindus, as well as Arabs and Jews. His attempt at division was based on physical similarities in skulls.
Blumenbach had a solitary Georgian skull; and that skull was the finest in his collection: that of a Greek being the next. Hence it was taken as the type of the skull of the more organised divisions of our species. More than this, it gave its name to the type, and introduced term Caucasian. Never has a single head done more harm to science than was done in the way of posthumous mischief by the head of this well-shaped female from Georgia. [Robert Gordon Latham, M.D., "The Natural History of the Varieties of Man," London, 1850]
The word has long since been abandoned as a historical/anthropological term. Compare Aryan.