Scale is often mistaken for "Gauge" and N scale is called "N Gauge." But, they are two very different terms. Where scale has to do with the "overall proportions" of the modeling, gauge is just the distance between the rails .
Gauge is normally expressed with the terms: Standard (4 feet 2 inches apart) or Narrow (which is less than standard and has been used in 3, 2 1/2 & 2 feet deminsions).
Ok, now for "N." This is very scientific.....
The German's were the originators of this size minature train and made the dimenision between the rails or gauge "9 millimeters." The German word for 9 starts with the letter "N" and it was adapted to the scale term.
Is N SCALE something NEW??
While the scale has been around for many years it really exploded on the public scene due mostly to the efforts of a group of modelers who organized "NTRAK" about 30 years ago.
Their intent is to standardize the deminsions for building a module(s), short layout sections, between 2 & 8 feet, so they could be connected together as a group anywhere with little difficulty.
It is a wonderful way to expose the masses at malls and other large public places to the model train world. The other scale model groups got on the modular bandwagon and did likewise and for many years now some form of modular train systems have been promoting this hobby. They have creeped out of the basements of individuals and into the light.