It comes from the Cold War. Highly advanced (at the time) countries were considered the first world. USA, Western Europe, Japan and others. The Second world was the USSR and their allies/satellites. And I’m pretty sure China and Cuba. And then the third world was everybody else, which really only leaves shitholes and “developing” nations.

So it’s not xenophobic because it’s got nothing to do with whether or not you like the people or their culture, it's literally just terms for Western Civilization (1), Communism (2), and everything else (3).

It comes from the Cold War. Highly advanced (at the time) countries were considered the first world. USA, Western Europe, Japan and others. The Second world was the USSR and their allies/satellites. And I’m pretty sure China and Cuba. And then the third world was everybody else, which really only leaves shitholes and “developing” nations.