Let me see if I understand this Wikipedia entry correctly.
Once upon a time (in the 19th century) some scientists were studying the human head. This science was called craniology. Some of the scientists were German. They found a skull in the modern-day region of Georgia (the former Soviet republic), near the Caucasus Mountains, that resembled a German skull.
The German craniologists believed that the German head was “optimized” and that the skull indicated that the first Germans must have come from Georgia and that the Georgians were therefore “the most beautiful race of men” because of their optimized heads and that all the white-skinned Europeans were therefore from a single race they dubbed “Caucasians”: beautiful white dudes with optimized heads who came from the Caucasus.
Not great science.
Wikipedia notes that this old-style concept of a “caucasian” race has been discredited, although the term can correctly be used to apply to people who actually live in that mountain range. Caucasoid is an alternative adjective. If you’re a white American and you think of yourself as caucasian, well, probably you aren’t.