The names used for these positions changed over the years, hence the confusion. But in short: Blue Cape GMs were Volunteer GMs, regualr regular players that were promoted from Tutorship to GM. Red Capes were CipSoft employees logged in GM characters.
special characters with extra powers, such as summoning creatures and creating items.
Due to that very specific confusion, CipSoft later started using CM for CipSoft employees and GM only for Volunteers. Later on the CM tag was restricted to the actual Community Management department (the employees we usually see in the Auditorium), because the other "CM"s were actually part of the Customer Support department. That change happened in a moment CipSoft started to enforce stopped enforcing rules in game manually, and eventually the they pretty much dropped the tags for new characters.