The Torah explicitly commands that Tzitzit be added to the four corners of garments. (Maimonides considered it one of the most important of the 613 Mitzvot); traditionally the wearing of Tzitzit began with this commandment, though biblical scholars consider it to be much older, and argue that the commandment reflected an already existing practice.
In early Judaism, Tzitzit were used for the corners of ordinary everyday clothing; most Jewish people at the time wore clothing which consisted of a sheet-like item wrapped around the body, comparable to the abayah (blanket) worn by the Bedouins for protection from sun and rain, and to the stola/toga of ancient Greece and Rome. As recorded in the Talmud, these were sometimes worn partly doubled, and sometimes with the ends thrown over the shoulders.
After the 13th century CE, Tzitzit began to be worn on new inner garments, known as Arba Kanfos, rather than the outer garments. This inner garment was a 3ft by 1ft rectangle, with a hole in the center for the head to pass through; the modern Tallit evolved from this medieval item. By modern times, the four-cornered sheet-like cloth fell out of fashion, and became regarded as impractical compared with alternatives; since most modern western clothing does not have four clear corners, the rule essentially became obsolete in daily life.
However, traditional Jews began to voluntarily wear a small tallit in ordinary life, in order to explicitely fulfill the commandment to wear Tzitzit; some Jewish commentators argue that it is a transgression to miss a commandment that one is able to fulfill. Tallit are also often worn during prayer for this reason, and this is practiced by a wider group of Jews. A tallit is often used as a Chuppah in Jewish wedding ceremonies.