A person 亻 standing 立 in their place — one's position at court. Where you stood before the emperor WAS your rank, so 位 became both 'position' and the polite way to count people.
这位老师 'this teacher (respectful)' — using 位 instead of 个 instantly upgrades your politeness. 座位 seat, 地位 status, 单位 work unit — the socialist-era word every Chinese adult still uses.
A PERSON STANDING in their proper place — POSITION, and the polite counter for people.
Restaurants greet you with 几位? 'How many (honored) persons?' — never 几个, which would count you like potatoes.