A class of cargo ship, like Handymax and Suezmax and Malaccamax, etc. Capesize originally meant 'vessels too large to transit the Suez Canal', i.e. bigger than Suezmax and Panamax. As such, it therefore was forced to transit around either the Cape of Good Hope or Cape Horn to transit between the Atlantic and Pacific oceans in the case of the latter, or the Atlantic and the Indian Ocean in the case of the former.
Essentially, it meant 'unlimited size, larger than Suezmax'. As of 2008, however, vessels that are Capesize can in fact now transit the Suez so long as they meet the draft restricion of 18.91 meters.
Capesize ships usually displace more than 150,000 DWT, and include the VLCC and ULCC classes of supertankers as well as the largest bulk carriers. Capesize vessels seem to generally have nine holds arranged along the length of the ship, and are bulk carriers rather than container ships.
Whether the name is a play on the word 'capsize' I have no idea. But it's startlingly close, isn't it?