WAD is a format created by ID software, first used in Doom. The first version was not a generic format for graphics. It was only generic in grouping files together (much like tar or cpio). The content of each file (while known) is very much specific to Doom and it's naming scheme.
The second version is a generic graphics format since it has a generic way of storing the type of each file it contains. First used in Quake, 8bit indexed images Types it can contain: palette, sprite(?), texture, plain image
The third version, defined by Valve, uses 24bit true color instead of indexed images