The term open source describes practices in production and development that  promote access to the end product's source materials.Before the termopen source became widely adopted,  developers and producers used a variety of phrases to describe the  concept; open source gained hold with the rise of the Internet, and the  attendant need for massive retooling of the computing source code. Opening the  source code enabled a self-enhancing diversity of production models,  communication paths, and interactive communities. Subsequently, the new phrase  "open-source software" was born to describe the environment that the  new copyright, licensing, domain, and consumer issues created.
Richard  Stallman
In  the early 80's, a programmer named Richard Stallman worked for MIT. He spent  huge amounts of time working on the 
original  Emacs, an operating system called 
ITS, and the  exceedingly cool 
LISP  machines.
Stallman  wrote good software. His programs were clever--they were frequently built around  a few good ideas that made everything else easy.
But  Stallman was also an ideologue. His software came with instructions: Share this  code with your fellow users. Learn from it. Improve upon it. And when you're  done, please give something back to the community.
To  Stallman, this sharing was a moral principle. And as it turned out, Stallman  would happily turn down money, fame and glory in the name of his moral  principles.
The  GNU Manifesto
In 1984, Stallman was wrestling with the software  equivalent of Napster. Like the Grateful Dead, he was an artist  who 
wanted users to share his work. He asked them to send him some money  if they could--so he could write more--but he never required them to pay a cent.  He didn't want to discourage sharing.
But Stallman had a larger problem: Even  if users could share the software that 
he wrote, they wouldn't be able  share anybody else's. This bothered him.
He could have gone down the Napster  route, and encouraged software piracy. Or he could have given up, and only  shared a few small tools.
Instead, Stallman decided to write an entire  operating system, a complete set of development tools, and all the applications  that anybody would ever need. He planned to give all these tools away, so that  his users would have something to share.
Sure, this was a pretty laughable  goal, especially for a man who lived in his office at MIT and rarely combed his  hair.
Stallman's vision is laid out in the GNU Manifesto. This manifesto is  either a profoundly important document or the mimeographed ravings of some guy  in the city park. I've never been entirely sure which.
The GNU  Project and The Free Software Foundation
"Free software" is a matter of liberty, not price. To understand  the concept, you should think of "free speech", not "free beer." -Quoted  from the Free Software Foundation web site
Stallman found some  volunteers, set up the Free Software Foundation, and started writing  software.
He wrote a new version of Emacs, which 
still gets rave  reviews from authors like Neal Stephenson. He wrote GCC, which was one of the  best C compilers of the age. He enlisted hordes of volunteers, who began to  clone the entire Unix toolset (which was quite popular at the time).
The GNU  project also adopted some their software from outside sources. They borrowed  the X Window System from MIT and Compaq. They adopted TeX (a typesetting system)  from Donald Knuth. They stayed away, however, from the BSD code, which was the  target of an AT&T lawsuit at the time.
Linus  Torvalds
By 1991, the GNU Project had either written or  located most of the parts of a complete Unix system. But they were having  problems with the kernel.
Stallman (and other volunteers) were working on a  kernel called the HURD. Unfortunately, the HURD was a bit 
too clever, and  the team had gotten in over their heads. They certainly weren't in any danger of  shipping.
Meanwhile, young Linus Torvalds was hacking on a tiny kernel, just  a toy. He announced it on comp.os.minix:
I'm doing a (free) operating system (just a hobby, won't be big  and professional like gnu) for 386(486) AT clones.
To compile  Linux, you needed GCC. To run any programs, you needed the GNU C library. And  half of the programs available for Linux were originally written by GNU  volunteers.
Linus never made any secret of his debt to the GNU project. He  even decided to use their (rather complicated) software license as a way of  saying thank you.
The Linux Explosion
But  despite Linus's debt to the GNU project, he made a much better leader than  Stallman. Linus was a software guy, pure and simple. He never spent much time  writing polemics or arguing philosphy. And he never planned very far ahead. He  just did his thing, and argued for his beliefs by example.
(Back when Linux  had perhaps a hundred thousand users, Linus made an offhand quip about "world  domination". Now that Linux is a household name, he no longer make jokes like  that.)
Linus could 
convince people, many of whom were frightened by  Stallman. And Linux grew from "just a hobby" to the third most popular operating  system in the world.
Netscape and Open Source
Eric  Raymond was an old friend of Stallman's. He had written some pretty good  software in his day, and helped edit the Jargon File, a compedium of folklore  about ITS, Unix and the Internet.
He wrote a paper called The Cathedral and  The Bazaar. (The Cathedral, in this paper, doesn't actually represent  proprietary software. If anything, it represents the HURD and Stallman's insular  development methodologies.)
Netscape took a liking to Eric's  writings, and decided to turn their browser into a bazaar.
Eric was very much  into spin control, as it turned out, and wanted to repackage Stallman's radical  ideas into a less intimidating form. He convened some friends, put the kibosh of  the word "free" (which was politically unacceptable), and helped coin the term  "open source".
At the time, people like Larry Wall, Brian Behlendorf and  Guido van Rossum weren't talking to each other, or to the Linux developers.  They'd built their own communities, but there was no real unification.
Tim  O'Reilly sold a lot of books about Perl, Python, Apache, and various other "open  source" software. The O'Reilly books were of extraordinarily high quality, but  they were proprietary. (Stallman had already pointed this out to anybody who  would listen.)
So people like Tim and Eric worked on the PR, and started  pulling these various groups together. And for the most part, their  efforts 
did accomplish something. Today, everyone's heard of open source,  and people like Guido and Linus actually talk to each other
The  True Leaders
But don't mistake the open source PR  schtick for the real heart of the free software movement.
Those of us in the  trenches have all wrestled with Stallman's ideas. Some of us have accepted  Stallman; others have rejected him. In our hearts, most of us are uneasy about  him. For better or for worse, Stallman's not a comfortable man.
Just about  everybody loves Linus and Guido and Larry. They're great guys, and they write  some cool software. They're decent folks, too--not fanatic preachers, but good,  solid people who are a bit embarassed by their fame.
Closer to home, we all  know some individual project leaders. These folks help maintain small (but  important) projects. Nearly all of them are volunteers, coding for love or  necessity. A few can make a living through consulting. With very few exceptions,  the project leaders are wonderful, helpful people.
Reference  :
[1] http://en.wikipedia.org/wiki/Open_source