RGB is "better" as it's the original raw native data.
However Component is backwards compatible with Black & White TV - so it's the native system in the TV world.
The broadcast video signal - which is essentially "composite" was originally just a single Black & White video signal - called "Y" (As it's intensity is graphed on the Y axis, with "X" beeing time. This is called a Waveform monitor.)
When color TV came along, there was a choice to either broadcast a black & white AND a color broadcast, or just make a color system that worked with the B&W system too. The choice is obvious. So "Y" remained untouched.
The trick was how to add color? Well some very smart engineer figured out that if you allready had the brightness of the image, you could convay JUST the amount of blue and red in the image, and anything left had to be green. The result is compoent video: Y - The Brightness of the image B-Y (Cb) - The blue signal, with Y subtracted R-Y (Cr) - The red signal, with Y subtracted
As a result; at any point in time the green data is calculated as follows: G=Y+(B-Y)+(R-Y) - The sum of all the signals.
The B-Y signal is refered to as Cb, Pb or in europe, simply "U" and the R-Y signal is refered to as Cr, Pr or in europe, simply "V"
The "U" and the "V" refer to their axis on a "graph of color", or rather; a Vectorscope.
The color channels are then modulated onto a subcarrier withtin the Y signal in composite video and for broadcast. A B&W TV will just ignore the color channels and display the Y signal properly.
So thoguh RGB is higer quality, Component is better suited to TV production.
I agree that the use of Red, Green and Blue connectors for component video is misleading. They should be reserved for RGB signals. In europe we actually often use RGB within a "SCART" cable between consumer devices, but there's no need for color codes there. I Think a much more suitable color code for component connectors would be: Gray , Light Blue (Cb) and Pink (Cr), but alas, it's too late now.
There is a clue to the signal type by the connector (in adition to the obvious lable!)… The order. RGB generally always has the connectors in that order: Red, Green, Blue Component generally always has the connector differently: Green , Blue (Cb), Red (Cr) The red is on the other side.