The University of California system was originally chartered by the California state legislature in 1868. In 1907, the legislature passed a law allowing local governments to establish junior colleges. The purpose of these junior colleges was to provide courses that were equivalent to collegiate curriculum at the University of California and that allowed, under a formal agreement proposed by UC faculty, transfer at the junior year to the campus at Berkeley.
In 1921 the legislature passed a law reorganizing the state's regional normal schools (teacher's colleges) into "State Teacher's Colleges." In 1923, the legislature granted those State Teacher's Colleges the right to give 4-year BA degrees. In 1935 the State Teacher's Colleges were renamed State Colleges and they were granted the right to have many different types of BA programs, not just teaching. In 1947 State Colleges were granted the right to give master's degrees.
The "State Colleges" or former "teacher's colleges" became the California State University system.
There is a great page that summarizes the legislative changes to California higher education
here.