A History of the Guitar

Guitar-like instruments have existed since ancient times (see the Guitar Museum), but the first written mention of the guitar proper is from the 14th century. In its earliest form it had three double courses (pairs) of strings plus a single string (the highest). The guitar probably originated in Spain, where by the 16th century it was the counterpart among the middle and lower classes of the aristocracy's vihuela, an instrument of similar shape and ancestry with six double courses.

The guitar became popular in other European countries in the 16th and 17th centuries, and by the late 17th century a fifth course of strings had been added below the other four.

In the mid-18th century the guitar attained its modern form, when the double courses were made single and a sixth string was added above the lower five. Guitar makers in the 19th century broadened the body, increased the curve of the waist, thinned the belly, and changed the internal bracing. The old wooden tuning pegs were replaced by a modern machine head.
from Microsoft Encarta

The guitar used be called a tavern instrument; one that could not meet the demands of classical music. In the early nineteenth century, Fernando Sor set in motion the quest that continues today, to raise the guitar to the greatest musical level possible. Sor was one of the most prolific composers for, and promoters of, the guitar as a "concert" instrument, in the last two hundred years. He, and others like him paved the way for Andres Segovia to emerge and bring the guitar to the immense popularity, and respect it enjoys today.

Guitars ranging from contrabass to treble, and with varying numbers of strings are played in Spain and Latin America. The twelve-string guitar has six double courses in standard tuning. The Hawaiian, or steel, guitar is laid across the knees of the player, who stops the metal strings by gliding a metal bar along the neck. The strings are usually tuned to the notes of a given chord.

The electric guitar, developed for popular music in the United States in the 1930s, usually has a solid, nonresonant body. The sound of its strings is both amplified and manipulated electronically by the performer. American musician and inventor Les Paul developed prototypes for the solid-bodied electric guitar and popularized the instrument beginning in the 1940s.
from "Guitar," Microsoft(R) Encarta(R) 96 Encyclopedia

In the early 1940s, a California inventor, Leo Fender, made some custom guitars and amplifiers in his radio shop and already was working on an amplifier (with no controls) and a matching lap steel guitar (with tone and volume controls). This was typical of the way the electric guitar was viewed at this time, as a total package, and not as an individual instrument.

With his knowledge of existing technologies, he knew he could improve on the amplified hollow-body instruments -- and he did. In 1948 he developed the legendary Telecaster (originally named the Broadcaster). The Tele, as it became affectionately called, was the first solid body electric Spanish-style guitar ever to go into commercial production.
from FENDER MUSICAL INSTRUMENTS CORPORATE HISTORY