In 1894, Pierre de Frédy, Baron de Coubertin—a French aristocrat and intellectual who had previously attempted to incorporate more physical education in schools—convened a congress in Paris with the goal of reviving the ancient Olympic Games (an idea Coubertin first introduced at a USFSA meeting in 1889). The congress agreed on proposals for a modern Olympics, and the International Olympic Committee was soon formalized and given the task of planning the 1896 Athens Games.
After the 1912 Stockholm Games—the first Games featuring athletes from all five inhabited parts of the world—a design of five interlocked rings, drawn and colored by hand, appeared at the top of a letter Coubertin sent to a colleague. Coubertin used his ring design as the emblem of the IOC's 20th anniversary celebration in 1914. A year later, it became the official Olympic symbol.
The rings were to be used on flags and signage at the 1916 Games, but those games were cancelled because of the ongoing World War. The rings made a belated debut at the 1920 Games in Antwerp, Belgium.
Coubertin explained his design in 1931: "A white background, with five interlaced rings in the centre: blue, yellow, black, green and red...is symbolic; it represents the five inhabited continents of the world, united by Olympism, while the six colors are those that appear on all the national flags of the world at the present time." Coubertin used a loose interpretation of "continent" that included Africa, the Americas, Asia, Europe and Oceania. He never said nor wrote that any specific ring represents a specific continent.
Because the rings were originally designed as a logo for the IOC's 20th anniversary and only later became a symbol of the Olympics, it's also probable, according to historian David Young, that Coubertin originally thought of the rings as symbols of the five Games already successfully staged.
(Taken from http://www.mentalfloss.com/article/31263/what-do-olympic-rings-mean)