The term referred to the observation that these newcomers tended to carry “carpet bags,” a common form of luggage at the time (sturdy and made from used carpet).
It was used as a derogatory term, suggesting opportunism and exploitation by the outsiders. Together with Republicans, they are said to have politically manipulated and controlled former Confederate states for varying periods for their own financial and power gains. In sum, carpetbaggers were seen as insidious Northern outsiders with questionable objectives meddling in local politics, buying up plantations at fire-sale prices and taking advantage of Southerners.
The term carpetbaggers was also used to describe the Republican political appointees who came South, arriving with their travel carpet bags. Southerners considered them ready to loot and plunder the defeated South.
In modern usage in the U.S., the term is sometimes used derisively to refer to a politician who runs for public office in an area where he or she does not have deep community ties, or has lived only for a short time.
In the United Kingdom, the term was adopted to refer informally to those who join a mutual organization, such as a building society, in order to force it to convert into a joint stock company, solely for personal financial gain.