The Motion Picture Association of America maintains a ratings board, which assigns a rating (such as G, PG and R) to every film released in the United States. It began as a way of addressing the profound creative changes in motion pictures during the 1960s.
Before The Ratings
Before the current ratings system was imposed, studios followed the Hays Code, which strictly defined what could be shown on screen. The Hays Code is one of the reasons why you never see any nudity or swearing in older movies.
In the 1960s, the studio system began to crumble, and movies were released with increasingly daring content. The decision was made to implement a new, voluntary ratings system in order to inform viewers of what they would see.
The New Ratings
The new ratings system was announced on November 1, 1968. Four categories of ratings were introduced: G, M (which later became PG), R and X.
A fifth rating was added in 1984: PG-13, which fell between PG and R. It arose over concerns from a pair of violent PG movies: Joe Dante's "Gremlins," and Steven Spielberg's "Indiana Jones and the Temple of Doom."
Another rating was added in 1990. In response to the social perception of the X rating (largely associated with pornography), NC-17 was applied to non-pornographic adult films that children would not be permitted to see.