Star Wars creator, George Lucas, took the Gaelic word Sith meaning fairy or sprite. Gaelic lore describes sith as good natured, tiny, winged creatures that live in the woods. Lucas's Sith were a lighthearted, primitive race of force adepts (those who had the ability to tap into the force).
The primative Sith did not have a great understanding of the force and only used their natural abilities for basic tricks.
The dark jedi had been exhiled from the know universe after the Great Schism (100 year war among the Jedi Order over banning use of the dark side of the force.) When the surviving dark jedi arrived, they easily conqured, corrupted and enslaved the Sith beings. Sith beings were forced to worship the dark jedi as gods. Dark jedi became known as Sith Lords able to study and embrace the dark side of the force. Sith now refers to all people from Korriban, including dark jedi.
Over thousands of years the Sith Lords built a great civilization on Korriban and the surrounding star systems, Sith Empire.
The Jedi of the Republic and Sith Order had eventually forgoten about each other until a chance encounter. Centuries of warfare erupted between the two orders with the Jedi normally getting the best of the Sith.
Sith Lords are their own worst enemy. There order was often racked by infighting and other forms of desention. The head of order stayed in power until challenged (killed). To curb this this, new Sith Empires follow the strict code. "Always two there are....no more...no less. A master and an apprentice."