Early Unix releases were named based on the edition of the documentation that described them. The term "Version 7" is really a misnomer -- the correct name is "Seventh Edition".

The Sixth Edition was the first to be widely distributed beyond Bell Laboratories, and, along with additions in the Seventh Edition formed the basis for much of the original BSD code. The Seventh Edition was the basis for System III and System V, with the Computing Research group later releasing the Eighth and Ninth Editions and the commercial side (originally Western Electric, but later reformed as a group at AT&T Bell Laboratories in Summit, NJ (whose name I can't recall), releasing the System V Releases 1 through 4, the first ports of which, invariably, were done internally on DEC VAX systems, AT&T-designed 3B-series systems (the 3B-20 was used extensively inside AT&T in the mid to late 1980s, and was the core of the #5ESS switching system sold by AT&T to the various Bell Operating Companies and to telephone companies around the world, and the 3B-2 was actually sold as a desktop Unix system by AT&T to the world at large in the mid-80s).