What is Third World?

Legal Definition
The term Third World arose during the Cold War to define countries that remained non-aligned with either NATO, or the Communist Bloc. The United States, Western European nations and their allies represented the First World, while the Soviet Union, China, Cuba, and their allies represented the Second World. This terminology provided a way of broadly categorizing the nations of the Earth into three groups based on social, political, cultural and economic divisions.

The Third World was normally seen to include many countries with colonial pasts in Africa, Latin America, Oceania and Asia. It was also sometimes taken as synonymous with countries in the Non-Aligned Movement. In the dependency theory of thinkers like Raúl Prebisch, Walter Rodney, Theotonio dos Santos, and Andre Gunder Frank, the Third World has also been connected to the world economic division as "periphery" countries in the world system that is dominated by the "core" countries.

Due to the complex history of evolving meanings and contexts, there is no clear or agreed-upon definition of the Third World. Some countries in the Communist Bloc, such as Cuba, were often regarded as "Third World". Because many Third World countries were extremely poor, and non-industrialized, it became a stereotype to refer to poor countries as "third world countries", yet the "Third World" term is also often taken to include newly industrialized countries like Brazil, India and China (see also: BRIC). Historically, some European countries were non-aligned and a few of these were and are very prosperous, including Ireland, Austria, Sweden, Finland, and Switzerland.

Over the past few decades since the fall of the Soviet Union and the end of the Cold War, the term Third World has been used interchangeably with the least developed countries, the Global South, and developing countries to describe poorer countries that have struggled to attain steady economic development, a term that often includes "Second World" countries like Laos. This usage, however, has become less preferred in recent years.
-- Wikipedia
Legal Definition
A phrase commonly used to describe a developing nation, but actually started as term used to describe a country's allegiance. A Third World country is a country whose views are not aligned with NATO and capitalism or the Soviet Union and communism. The use of the term "Third World" started during the Cold War and was used to identify which of three categories the countries of the world aligned with. The First World meant that you aligned with NATO and capitalism, and the Second World meant you supported Communism and the Soviet Union.