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In the army, a Lt General thus is a rank just below that of a General. Yes there is a confusion, no doubt, but the root comes from one being a second to the rank of a General and the other (Major General), being senior to a Brig General.
Before 1871, when the whole British Army switched to using the current rank of Lieutenant, the Royal Artillery, Royal Engineers and Fusilier regiments used First Lieutenant and Second Lieutenant. The First Lieutenant (1st Lt) in a Royal Navy ship is a post or appointment, rather than a rank. Historically the lieutenants in a ship were ranked in accordance with seniority, with the most senior being termed the First Lieutenant and acting as the second-in-command, unless the ship was complemented with a Commander.