Confetti are not tiny dots of coloured paper but the sugar-coated almonds that Italians give you before weddings, Christenings and graduations. The verb confettare means “to coat”.
Originally, during Carnival, it was the town's aristocracy who got to ride on the floats and they would throw the sweets to the crowd. [One wonders if they caused any injuries!] The practice eventually died out and the gentler activity of throwing paper around replaced it.
The Italian for what Anglophones know as “confetti” is coriandoli.