The open-source microblogging software Laconica was developed by the company of the same name, owned by Evan Prodromou, starting around 2007. It was to be the basis of the social network Identi.ca, and a hosting service for the internal networks of various companies. Since Laconica was open-source, any user had the right to run their own public instance of the software, and Prodromou wanted these instances to be able to communicate with one another, like e-mail servers.

For this purpose, he created the OpenMicroBlogging protocol, which, although limited, allowed Identi.ca users to communicate with users of other Laconica instances, like Leo Laporte's TWiT Army. In August 2009, Laconica - both the company and the software - was renamed to StatusNet. The same year they began developing OStatus as a more advanced protocol for federation, which by March 2010 had allowed different StatusNet instances to act almost as a single social network.

Adding to this were other projects, such as Friendica and GNU social (which would eventually replace StatusNet), which used the same protocol but with a different (in the provided examples, Facebook-like) feature set. Though Identi.ca remained the central server that most users went to, this collective of servers communicating using OStatus became known as the "federated social web," or alternately as the "Fediverse".

In 2013, StatusNet Inc. was running short on money. Prodromou closed registrations for Identi.ca and laid off the company's staff. But his efforts continued, as he developed a new, more extensible platform called Pump.io. It was never as popular as Identi.ca or StatusNet, but those interested in the future of the federated social web followed its development closely.

That June, StatusNet development merged with GNU social. Without Identi.ca as a central hub, the number of instances expanded and decentralization was realized. I started getting involved a few years after this change; I tried out GNU social as part of a broader effort to open-source my life, and I found quite a lot of people also involved in open-source.

Unfortunately, the federated social web of this time was quite poorly moderated; there were servers with rules against certain kinds of harmful content, but their admins had difficulty keeping up with other instances that did not share the same rules, including a lot of "free speech" instances that permitted everything within the law. The existing platforms were not yet able to suspend entire instances, so the moderators of each instance were effectively required to moderate the whole fediverse.

Mastodon's arrival on the scene nearly constituted a reset of the federated social web. Upon its release in 2016, it federated with GNU social, but it quickly eclipsed that platform in userbase, and most of the new users were unaware of the history behind the federated social web. While Mastodon expanded, GNU social seemingly stagnated, with major instances either disappearing or moving to more advanced federated platforms like Mastodon or Pleroma.

Mastodon saw significant expansion in 2017, with #DeleteFacebook and similar pushes against proprietary social networks, and a few larger companies supporting the platform. This was also the first time many instances began suspending, or "defederating from", entire other servers in the Fediverse.

Blocklists of instances with problematic content were widely shared, effectively shutting those instances out of the network; most successful was the #FediBlock hashtag, started by Black users such as artist Marcia X. For a time, this was highly effective in protecting some users, and even led to the fediverse becoming a haven for queer, leftist, and neurodivergent communities. Unfortunately, racism on the Fediverse persists to this day, even on some otherwise well-moderated instances.

Around the same time, Pump.io's ActivityPump protocol was being built upon by a number of experts to form the W3C standard ActivityPub. Mastodon, Friendica, and Pleroma were eager to adopt the new standard, even before it was formally published, and eventually Mastodon and Pleroma would drop their support for OStatus. The Fediverse would continue to expand and new platforms were developed - PeerTube for video sharing, Pixelfed for image sharing, BookWyrm for book reviewing, etc.

In October of 2022, billionaire tech mogul Elon Musk completed his purchase of Twitter, the platform that the largest Fediverse platforms had always aimed to compete with. Under his leadership, in just a month, most of the company's staff was fired, several features of the website became broken, right-wing content was massively promoted, and fears rapidly rose about the website dying or becoming the exclusive territory of the far-right.

As a result, many fledgling social networks, as well as established networks with better reputations, absorbed massive influxes of Twitter users. The Fediverse was among the more established networks; it saw activity rise into the millions of users, and that's where things stand now. Amidst chaos on the large instances, the usefulness of the Fediverse in finding communities has increased greatly.

A couple additional notes:
- There were plenty of federated communication platforms before Identi.ca. Usenet, FIDOnet (federated BBSes), IRC networks, and of course, e-mail are examples. The lineage to Mastodon is less direct, but it's there.
- The Diaspora social network, founded and crowdfunded in 2010 by four NYU students and inspired by the ideas of Eben Moglen, is another large federated microblogging platform, but uses its own protocol and is separate from the others.

- The maintainers of GNU social also worked on the federated music community GNU FM, of which the most prominent instance was Libre.fm (which I also used around the same time I used GNU social). As @mattl describes it, GNU social was his effort to redirect use of GNU FM as a social network, to something better suited for social networking. Both projects started around 2009.

Made some edits to the thread. @clacke tells me that the term Fediverse has been in use since 2011-12, and I can believe that. @jesuisatire confirmed my suggestion that instance suspensions didn't exist in the fediverse during the GNU social era - at the very least, Friendica did not have such a feature.

More edits: comments by @mattl indicate that the GNU social project existed long before StatusNet merged with it, which is confirmed by this FSF blog: <https://www.fsf.org/blogs/community/fsf-to-host-gnu-social-architecture-meeting>. I've updated my wording to reflect that.

Another note (updated thanks to detailed explanations in a reply by @clacke):
I previously left out Diaspora from this thread because it doesn't directly federate with the social networks I mentioned, but it does, partially. Thanks to common elements in Diaspora and StatusNet software stacks, users of Identi.ca, and StatusNet and GNU social instances, can see posts from Diaspora users. However, the differences mean that Diaspora users can't see their posts, and replies do not work.