Fräulein is a diminutive (‘Verniedlichungsform’) of Frau.

Diminution is considered an intimate act, used a lot with nicknames couples give each other (Häschen, Mäuschen, Bienchen, Bärchen) or for “lovely little beings” like children and pets. So using Fräulein has a touch of intimacy not convenient to many women.

Addressing an unkown woman as Fräulein can be considered as impolite as using Du without having been offered it. The word Fräulein was particularly used to call waitresses and other female assistance in service jobs (not necessarily a bad status, even a female manager of an hotel would be a Fräulein).

Etymology of the word

Until the beginning of the 19th century the word Frau was only used for royal women, a Fräulein was their female child. Within the 19th century the word meaning changed and became used for women having a profession. This usually ended with marriage (in some cases, e.g. female teachers, you had to be unmarried to work). This indicated that a Fräulein was unmarried and “free to go”. This part of the name didn’t change even when getting very old as long as you didn’t marry (and gave up the profession).

The usage of Fräulein is discouraged by the state since 1972 in Germany. In the same decade the feministic movement pointed out that using the diminutive form changes the gender of the word from female to neutrum, this can be considered equally to not acknowlidging the gender of a person but is felt by many as a philosophical question. Since most of the time diminutives are used to address pets and children, the conclusion that Fräulein are not seen as independent and self-determined beings can’t be disproved.