This is explained quickly. 年 means year and 青 stands for the color(s) blue/green. This is the color of plants that are still alive and thriving, still fresh. Thus 青年, literally blue/green years, is used to refer to persons who are in the best years, around 20 years of age.

Of more interest is the color 青. Color is light of a particular frequency out of a continuous spectrum, ie this no absolute border between two adjacent colours. Think of a black-white gradient:

Can you tell exactly where the border between white and gray is? Black-White Gradient

Keeping this in mind, it shouldn’t be surprising that different cultures would divide the color spectrum into different colours. And in Japan, 青 ao stands for a colour that is somewhere around blue/green. It should also not be surprising that certain types of green and blue, which we call by different names, may both be termed ao in Japanese.

PS: The traffic lights in Japan contain the colour ao.

PPS: Actually, ao was originally a vague, generic terms which meant almost nothing:

あお【青(▼蒼・▼碧)】 アヲ

and we also find that people do not care about western conventions in their daily life:

あお あを【青】
① […]本来は黒と白との仲間の範囲を示す広い色名で、主に青,緑,藍をさし、時には,黒,白をもさした。