The word 'classical' began as a Roman ranking of citizens by wealth
Before it meant timeless literature, classis was a naval fleet and a property bracket in Roman society, used to sort army draftees from first class to fifth. A writer called classicus belonged to the top tier. So calling Cicero's Latin 'classical' originally meant something close to first-class, certified and reliable.
Classical Latin is the polished literary standard of the late Republic and early Empire, emerging from Old Latin around 75 BC and shading into Late Latin by the third century AD. Cicero and his contemporaries already separated everyday Vulgar Latin from a refined register they called latinitas, the 'speech of the city' or 'of the good families'. They even had an adverb for speaking it well, and a comparative meaning 'more Latinly'.
The idea of a canon came from Greece. Roman teachers such as Quintilian copied Greek lists of approved authors and matched each Latin writer to a Greek model, so that Ennius became the Latin Homer and the Aeneid the Roman Iliad. In the second century AD the lawyer and teacher Marcus Cornelius Fronto spoke of scriptores classici, reliable authors whose works modelled good Latin, the earliest known use of the idea for writers.
The label then vanished for centuries before returning with the Renaissance, reaching French in 1548 and English, according to Merriam-Webster, in 1599. The now familiar 'Golden' and 'Silver' ages of Latin literature were systematised much later, by the German scholar Wilhelm Sigismund Teuffel in 1870. His Golden Age ran from Sulla's dictatorship to the death of Augustus, split into a Ciceronian period when prose peaked and an Augustan one when poetry flourished. Periods were fixed by political events rather than style.
Not everyone thought the polish was a gift. The English scholar Charles Thomas Cruttwell, who borrowed Teuffel's periods in 1877, argued that golden-age rules cost Latin its spontaneity, so that it was studied as a dead language while still alive. Even the borders stayed fuzzy: whether the playwright Terence counts as classical depends on who is doing the counting.
Source: Classical Latin