Literal translation into the American Language is "Captain". People have used and continue to use this term to characterize a Mafia family member to signify their relevance and importance to their family. A captain "orders" soldiers to do certain tasks needed. Capos get their orders from underbosses, who get them from the family Consigliere, who gets his from the boss.
"Ohhh Paulie, you hear that Giovanni became a Capo!?"