The House of Orange
The Dutch East India Company was the organization that first brought tea to Europe in 1610 - green tea from Japan, to be exact. Before long the Company also imported China tea and promoted it very successfully. The finest teas were reserved for the Dutch Royal Family, the House of Orange, and so this finest Pekoe tea was promoted to the Dutch public as Orange Pekoe to suggest a royal warrant. Hence an Orange Pekoe is a top quality Pekoe tea.
There may also be a connection to the British and tea from all this. The head of the Dutch Royal Family at the time was William the Second (on the right). He married Mary Stuart, the daughter of King Charles I of Great Britain. She was 10 years old and he was 15! Anyway they had only one son, William III who became King of Great Britain as well as Prince of Orange. So you might think this was how tea was introduced to the English but in fact tea had already crossed the English Channel by the time he became king. However I am sure he encouraged its use in the English Court.
The Orange Pekoe Grading System
So much for the origin of the name, what does it actually mean to us now? For a tea to be an OP grade, it must consist of the top two leaves and the bud. As the leaves below this are of an inferior quality for tea, this is a statement of quality (to some extent anyway). The various subgrades of the basic OP grade are ways of categorising the size of the finished leaf and the amount of leaf bud in the tea blend.
So finished teas smaller than OP are graded as BOP or Broken Orange Pekoe. Some teas are better tasting when cut up smaller - Ceylon teas in particular. Below BOP in size terms are Fannings and Dust, the latter being the standard size for teabags.
Some tea companies have tried to make things more complicated. You might find a tea labelled as SFTGFOP-1 which means Super Fine Tippy Golden Flowery Orange Pekoe, grade 1 but, as there is no real agreement on what all these other categories mean, it is all so much marketing speak. In this it is best to rely on your tea supplier to be sure of the quality.