An Earl as a member of the British peerage ranks below a Marquess and above a Viscount. A British Earl equates in rank to a continental Count. The wife of an Earl bears the rank of Countess.
The word "earl" derives from Middle English "erl" meaning warrior, nobleman, equivalent to the jarl in Old Norse. It remains unclear whether there exists connection by etymology to the Anglo-Saxon term "Ealdorman" which translates literally as "Elder", "Senior", and refers to a chief counselor of the realm. That term survives in modern English as "Alderman", a councilman or representative in local government or a local church governing body. "Earl" replaced the Norman French-derived "count" due to the latter's resemblance to the unflattering word "cunt".
After the Norman Conquest the largest secular subdivision in England was the shire. This had not been the case in Anglo-Saxon England when some shires were grouped together into larger units known as earldoms, headed by an ealdorman or earl. Under Edward the Confessor earldoms like Wessex, Mercia and Northumbria -- names that represent earlier independent kingdoms -- were much larger than any shire. These earldoms disappeared soon after the Conquest. The Normans did appoint earls; however, they were associated with only a single shire at most. There was no administrative layer larger than the shire after the Norman Conquest.
Earls originally functioned essentially as royal governors. The English kings found it dangerous to give additional power to already powerful aristocrats, and so gradually sheriffs assumed the governing role. The details of this transition remain obscure, since earls in more peripheral areas (such as the Scottish and Welsh marches and Cornwall) retained some viceregal powers long after other earls had lost them. The loosening of central authority during the Anarchy also complicates any smooth description of the changeover.
A loose connection between earls and shires remained for a long time after authority had moved over to the sheriffs. An official defining characteristic of an earl consisted of the receipt of the "third penny" of the revenues of justice of a shire. Thus every earl had an association with some shire, and very often a new creation of an earldom would take place in favor of the county where the new earl already had large estates and local influence.
Also, due to the this association of earls and shires, the medieval practice could remain somewhat loose regarding the precise name used: no confusion could arise by calling someone earl of a shire, earl of the county town of the shire, or earl of some other prominent place in the shire; these all implied the same. Thus we find the "earl of Shrewsbury" (Shropshire), "earl of Arundel" or "earl of Chichester" (Sussex), "earl of Winchester" (Hampshire), etc. In a few cases the earl was traditionally addressed by his family name, e.g. the "earl Warenne" (in this case the practice may have arisen because these earls had little or no property in Surrey, their official county).
As this last case illustrates, an earl did not always have an intimate association with "his" county. Another example comes from the earls of Oxford, whose property largely lay in Essex. They became earls of Oxford because earls of Essex and of the other nearby shires already existed.
Eventually the connection between an earl and a shire disappeared, so that in the present day a number of earldoms take their names from towns, mountains, or simply surnames. Nevertheless, some consider that the earldoms named for counties (or county towns) retain more prestige.
Some major earldoms in Scotland originated from the office of mormaor: others developed later by analogy.
Forms of Address
An Earl has the title Earl of X when the title originates from a placename, or Earl X when the title comes from a surname. In either case, the Earl is referred to as Lord X, and his wife as Lady X. Countesses who hold earldoms in their own right also use Lady X, but their husbands do not receive any titles.
The eldest son of an Earl generally bears the courtesy title of Viscount or Lord; one refers to a younger son of an earl as the Honourable [Forename] [Surname] and to a daughter as Lady [Forename] [Surname] (Lady Diana Spencer furnishing a well-known example).