The talking heads at the WWL will use this term ad nauseum, but what does it really mean and do they even know what they are talking about. Well inspired by the mighty mountaineers I will give you my dissertation on the subject.
I assume when people talk about parity they mean that on any given Saturday any team can win, so why did this start and why is it happening? The first factor certainly has to be NCAA rule changes regarding scholarships. Teams are now limited in scholarships and can only travel 55? players for a conference game. Obviously this spreads the talent pool and deters super teams such as the Oklahoma's of the 60's and 70's. This aspect seems rather obvious and becomes the main factor for many "Expert's" analysis.
In my opinion its much more complicated. Quick history lesson: In the 1970's Mouse Davis implemented the "Run n Shoot" offense (read Steve Spurrier) which essentially spread the field vertically and laterally. from that point on the Spread philosophy was born. While many have adapted this philosophy it all really relies on the same principles. Many, however, could not, or did not run the ball effectively and so it became somewhat of a gimmick.
Fast forward to the mid 90's when Rich Rodriguez coached at (Northwestern I think) A QB misses the handoff on a simple zone play and ran around the end who was crashing on the back. (no idea if this is actually true) At this point one could argue the spread option was born. Many old option coaches will tell you they run the option (veer, midline, speed, load, etc) because of the strain it places on a defense, and in general the ability to do more with inferior athletes. And today coaches are adapting many old styles of football to spread formations that stress the defense on different levels. (Urban Meyer= singlewing and wishbone philosophies)
Now consider the rise in popularity of football, specifically in the level of involvement on all levels. In the modern game the need for hard nosed fullback is replaced by the speedy kid with hands, kids who were deemed to small by the coaches of yesteryear are now recruited in high school hallways. Even huge lineman are only valuable if they can move. In short a more diverse athlete is now playing football. Sure size and strength are always going to be factors in a player's "value" but speed is now becoming the trump card. Essentially now you have a situation where balanced offenses that stress defenses, coupled with a different type of athlete (especially QB's) allow for "inferior teams" to not only compete but to beat traditional powerhouses.
Football is a game of stealing. Meaning when someone develops a defense or strategy to control the new offenses everyone else will follow suit. (Oklahoma wishbone vs. Miami 4-3) football is ever evolving and certainly the game 20 years from now will look different than today's version.
So is the ever evolving X's and O's of football the answer for this assumed parity. Well kinda... one could always argue the actual scheme vs. the execution of said scheme. I think you also have to look at the evolution of S&C programs. Technology has its place, in relation to scouting opponents and its effect on schools' ability to recruit. With that being said, the spread offense that has the ability to run and pass effectively, get their athletes in space, control the game, and score (duh) is one explanation for the competitive balance in college football today.