Originally, soccer was played under the supervision of team captains, and the captains would have to agree on any points related to the game, such as when a goal is scored, a foul is committed, and when time has expired. Sometimes, however, the captains could not agree. A neutral person would be present at competitive games in order to resolve disputes that the captains could not resolve themselves.
Thus, the captains would refer to this neutral party, making him the referee (much the same way that a person who is employed is an employee). In this early stage of soccer history, the referee had no power or authority except when referred to by the captains, in which case the referee's decision would be final on that point only.
While other sports employed umpires to decide on all points of the games, the soccer referee was a passive arbiter. As soccer evolved and became more competitive, the need was seen to have an umpire on the field to decide on all points, as other sports did, and so the referee moved from the sideline to the field of play, first with a handkerchief, later with a whistle, and most recently with penalty cards and assistants with flags.
This evolution of the referee followed with other sports as well, though some sports (such as Cricket and Baseball) retain the umpire nomenclature, and some (such as volleyball) use both a referee and an umpire.
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