From what I remember, WotC came up with the idea of "blocks", or "cycles" sometime during the Mirage era, and it was their way of finalizing the setup of T2. By setting everything up in blocks it made it easy to understand what would be cycling out of T2, and, more importantly, when.
Before that the T2 card pool was defined exclusively by DCI declaration.
T2 had been advertised originally as consisting of only the latest version of the Basic set and the 2 most recent expansions, but more than once they changed their minds and extended it to include Fallen Empires, IMO for 2 reasons; Necro players would have whined about losing their Hymns, and WotC had LOTS of leftover Fallens due to a huge print run and a mediocre card set.
It's actually a good thing that they did though, because in the end it made it so that at any given time at least 4 expansions are available for T2 play (and the cards are eligible longer).
Those names Griffy found? I've heard them before and thought they were inaccurate, but it's possible they were a couple of the names WotC threw out there to try and round things out. I mostly remember the Ice Age thing being called ALICE (Ice Age/Alliances) and the Mirage thing called MirViLite (Mirage/Visions/Weatherlite).
Homelands was a throw-in to the Ice Age block once they decided that each block should have 3 sets, but that idea was an afterthought. You're right - the Rath Cycle was the first block of 3 sets of cards that all had a common storyline associated with them.
Oh, and I like how Orgg named the Seige cycle. That's cool!
