The 1977 amendments to the Clean Air Act called for daily analysis and reporting of air quality based on a uniform air quality index (see Section 319, "Air quality monitoring," http://www.epa.gov/air/caa/title3.html). The first index was called the Pollutant Standards Index (PSI). In 1999, a new health category and two pollutants were added, and the name was changed to the Air Quality Index (AQI).
For an overview of the current AQI, please see http://www.airnow.gov/index.cfm?action=aqibasics.aqi.
For a technical summary of differences between the PSI and the AQI, see http://www.epa.gov/air/data/help/hpsi.html .
For more background, try the Federal Register notice on AQI Reporting, https://www.gpo.gov/fdsys/pkg/FR-1999-08-04/pdf/99-19433.pdf.