FAT12 is the prime FAT. As file system of floppy disk, it has several limitations. It dose not support layered structure, cluster addressed is only 12 bytes, which make the controlling of FAT a little difficult, and it only supports at most 32M(216) partition.
At that time, the entry level disc is 5.25, one side, 40 magnetic tracks, 8 sectors in a track, and its capacity is slightly less than 160KB. The above limitations exceed one or several orders of magnitude of this capacity, and enable all the controlling structure set in one track. The magnetic head moves during read-write operation. These limitations were increased in the following years. Because the only root directory must be set in the first track, the amount of the filestore is limited to dozens.

In order to well support IBM PC XT featured by its own 10MB hard disk, MS-DOS and the computer were nearly released at the same time. It applied level directory structure. It is not only preferable for framework documents, but also allows storing more files on the hard disk. Because the maximum number of files is not limited (but still fixed) by the capacity of root directory, this number is now equal to the number of cluster (it even bigger, because the 0 byte file does not take any space of FAT cluster)
FAT it self dose not change. The 10 MB hard disk of PC XT contains 4KB cluster. If a 20MB hard disk is installed and formatted by MS-DOS 2.0, the final cluster will become 8KB, and the capacity of the hard disk will be 15.9MB.