What constitutes a Third World country? Well it depends when in history you ask the question. The meaning of "third world" has developed greatly since it was first used over half a century ago.
It was initially coined in 1952 by French historian Alfred Sauvy, "Third World" was part of the "three worlds" label system used to describe a country's political alliances. First World countries were mainly democratic NATO countries such as the United States, Japan, and much of Western Europe. Second World countries were mainly Communist Bloc countries, which included the Soviet Union, China, and their allies. Lastly, Third World countries were countries that remained neutral and allied with neither side.
Nonetheless, that meaning changed after the Soviet Union plummeted (and the end of the Cold War) in the early 1990s. The Third World lost its political root and came to refer to economically poor and non-industrialized countries, along with newly industrialized countries. Under this modernized definition, Third World countries are those that display economic, social, political, and environmental issues such as high poverty rates, economic instability, and lack of essential human resources compared to the rest of the world.
For instance, going by the historical definition, nations such as Finland, Sweden, Ireland, and Switzerland were not aligned with either NATO or the Communist Bloc, and so were Third World countries. Nonetheless, not one of these nations would be regarded as Third World countries under the current definition—they're all too flourishing.
This mixture of confusion and possible insult has made the Third World mainly obsolete. Instead, most present day speakers and writers regard more accurate, inoffensive terms such as "developing countries" and "least developed countries" (calculated by the United Nations) or "low-income countries" (based upon World Bank data).
In conclusion, the definition is constantly changing which has caused significant confusion as to which countries could accurately be called Third World nowadays. Adding insult to inaccuracy, when used in its current context, the Third World is regarded to be a derogatory term that degenerates countries which are developing and/or poor.
DATA REFERENCE: WORLD POPULATION REVIEW