Carat - the unit of measure originates from the word "carob".  The Carob tree is an evergreen tree  native to the Mediterranean region and it is believed that the seeds were the original "carat", since their size and availability made them a perfect tool to weigh diamonds.  A carat is equivalent to 200 milligrams or 3.086 grains troy ounce and is divided into 100 points.

Do not confuse equal carat weights with equal value.  Two stones can easily be of the same size and have a vast difference in value.  As mentioned, the larger the stone the rarer it is.  As such, the price per carat will increase dramatically as the individual stone weight increases.

Also note that weight is not always the same as size, Some deep cut diamonds (see diamond cut) can have an abnormally small diameter. eg. it is possible for a poorly cut 1crt diamond to have the same diameter as a well cut 0.90ct.

The table below represents the average size/weight ratio's of well cut diamonds 

Take an interactive tutorial " How to buy a Diamond"

Note: the table above is only as a guide and is not meant to represent the actual size of the stones themselves.  Also, since each diamond is uniquely and individually cut, the actual diameter will vary.