I estimate that "defining" started becoming a bit more prominent in the 60's and 70's esp. in larger metropolitan areas in the U.S. having diverse Jewish communities. Most Hasidic groups wore hats or shtreimels, etc. People who were strictly religious but not "Hassidic" and didn't wear shtreimels, wore black hats / fedoras - they still do. B"H, they're keeping Borsalino still in business (LOL)! A step below that for those not wearing hats, they wear black kippot.
On the "opposite" end, I recall that silk "big dome" yarmulkes were the only type you got at a Bar Mitzvah and wedding. I guess making crochetted or leather ones weren't yet in style or the cost was prohibitive. Parents who wanted to get their toddlers interested in wearing kippot encouraged them by getting one withe their name engraved and having some design or colors (other than black) so they would find wearing a kippah more exciting. Teenagers and some older people picked up on the idea, and that spread.
Commercialism picked up, somewhat on the idea as well. Maybe they saw the kippah as a form of "advertising". I've seen kippot with store names and sports teams (Mets / Yankees) on them. I'm not saying that the sports teams, themselves are promoting the kippot, but whoever is creating them is somehow influenced (and, perhaps, getting a "kickback") from a sports tema or some connection to it?