When transponders were first generally introduced they were civil variants of the military IFF. The encoding of the squawk information allowed for (I think) three basic modes A,B, and C. Mode A was for civil use and modes B and C were for military use to allow air defence radar sites to have hopefully positive id on military a/c. In time Mode A has become the standard and the terminology has assumed in the civil world that this is the only one used. Mode C for altitude reporting arrived a lot later.