The story
PIE word *ḱm̥tóm From hundreds + and + thousands. Sense 2 (“tiny balls or strands of multicoloured sugar”) is from the fact that the confectionery is made up of numerous sugar pieces.
Etymology from Wiktionary, CC BY-SA 4.0.
hundreds and thousands
hun·dreds and thou·sandsToday it means: An indefinite but emphatically large number. Full definition →