C envelope sizes are defined as the geometric mean of the A and B sizes with the same number i.e. C4 dimensions are the geometric mean of A4 and B4. This produces a size between the two that makes an envelope that will neatly hold the A series paper of the same size, thus a C4 envelope is perfect for an A4 sheet of paper unfolded.
Again with the A - B sizes the paper is measured by mm and inches and a visual variation of how the sizes fit together are displayed below.
DL Envelope Size - The Business Envelope Extension
One of the most widely used business envelopes, the DL format does not fall under the C series sizes as it has a different aspect ratio. This envelope originated in Germany in the 1920's and was known as DIN Lang, but DL is now more commonly expanded to 'Dimension Lengthwise'. This size is defined in the ISO standards for envelope sizes, as the standard would have been remiss in omitting the most commonly used business envelope size.
Why are they needed?
To create a perfect size envelop to fit A size formats.