Below is a short history and origin of Academic Degrees, Academic Regalia, Hoods and their colors, and related matters, excerpted from:
The History of Academical Dress in Europe
During the thirteenth century a system of degrees seems to have come into being at the universities then in existence. The three grades common to all were those of Scholoar, Bachelor, and Masters (sometimes called Doctor or Professor). The scholar attended lectures and argued on set questions in the schools, the bachelor was a student-teacher who was seeking to obtain a license to teach in his own right. The mastership was the highest grade in any faculty, and carried with it the obligation to lecture in the university for two years after inception.  ‘Doctor’, like ‘Master’ and ‘Professor’, originally meant no more than ‘teacher’ or ‘learned man’. All three terms were thus at first synonymous, but during the fourteenth century the title ‘Doctor’ began, particularly in southern Europe, to be used instead of ‘Master’ for the chief degree in the Faculties of Canon Law, Civil Law, and Medicine, but not in those of Theology and Arts. Masters of Theology later became known as doctors except in France where as late as 1584 they were still called masters.
The system of degrees in the three original universities was accepted in more or less the same form by all universities subsequently founded. As time passed differenced occurred in various countries, a few of which are worth mentioning. Thus in France the degree Bachelor of Arts came to be little more than a first public examination, and the Mastership in Arts was gained after a mere two years study in philosophy. In England the Mastership in Arts became all-important and without it membership of Convocations or Senate was impossible. In Italy a doctorate became almost a necessity for success in the academical world. In Germany the Bachelor of Arts degree vanished in the sixteenth century  and the Mastership of Arts was incorporated in the new title of Doctor of Philosophy which took its place. Quite early the licentiateship became an actual degree in the Faculty of Law at French universities.
In all universities a distinction existed between Regents and Non-Regents, that is those actively engaged in the teaching work of their university and those who, having satisfied the requirements of necessary regency, were no longer employed in public lecturing, either because they did not wish to or were considered unsuitable. Although non-regents had the right of the ius suffragii, the regents gained greater rights and wider powers.
Gradually a rule of precedence for faculties and degrees
came into being and was practically the same in every university. An
Act of the University of Vienna of 1389 gives orders for the precedence
to be observed in processions. The banner of the university is to be
carried first, then are to come Bachelors of Arts, then Bachelors of
Medicine, followed by Bachelors of Law, the Bachelors of Theology, then
Masters of Arts, Doctors of Medicine, Doctors of Law, and Doctors of
Theology, Nobles walking with the Doctors. With Bachelors are to walk
their group of Scholars, and with Masters of Arts and Doctors their
Licentiates. This is a very clear example, and is particularly interesting
as showing the position of licentiates. Among the students the separate
status of nobleman, scholars, and commoners was commonly recognized
at all universities.
 On the licentia docend which, as at Paris, had originally
always been sought from the chancellor of the cathedral, since he had
been the magister scholarium of the cathedral school, see K. Edwards,
The English Secular Cathedrals in the Middle Ages, chap. 3. The licentiate
was one who had fulfilled the requirements of the course for the mastership,
but who had not yet qualified for it by necessary regency.
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