Wikipedia Explains The History of Costume Jewellery

http://en.wikipedia.org/wiki/Costume_jewelry#General_history

The term costume jewelry dates back to the early 20th century. It reflects the use of the word "costume" to refer to what is now called an "outfit"; for example, a "handsome street costume of maroon brown velvet". Costume jewelry is meant to complement a particular fashionable garment or "costume"; Hence the name, "costume jewelry".^[2]