In the late 1960's, most computer users bought a single large system for all of their data processing needs. As their needs expanded, they rarely bought a different system from a different vendor. Instead, they added on to their existing platforms, or they replaced it with a newer, larger model. Cross-platform connectivity was essentially unheard of, nor was it expected by customers.
These systems used proprietary networking architectures and protocols. For the most part, networking consisted of plugging dumb terminals or line printers into an intelligent communications controller. And just as the networking protocols were proprietary, the network nodes were proprietary as well. To this day you still can't plug an IBM terminal into a DEC midrange system and expect it to work. The protocols in use are completely incompatible with each other.
In an effort to cut the costs of development, the Advanced Research Projects Agency (ARPA) of the Department of Defense (DOD) began coordinating the development of a vendor-independent network to tie major research sites together. The logic behind this is clear: the cost and time to develop an application on one system was too much for each site to re-write the application on different systems. Since each facility used different computers with proprietary networking technology, the need for a vendor-independent network was the first priority. In 1968, work began on a private packet-switched network.
In the early 1970's, authority of the project was transferred to the Defense Advanced Research Projects Agency (DARPA). Although the original ARPAnet protocols were written for use with the ARPA packet-switched network, they were also designed to be usable on other networks as well, and in 1981, DARPA switched their focus to the TCP/IP protocol suite, placing it into the public domain. Shortly thereafter, TCP/IP was adopted by the University of California at Berkeley, who began bundling it with their freely distributed version of UNIX. In 1983, DARPA mandated that all new systems connecting to the ARPA network had to use TCP/IP, thus guaranteeing its long-term success.
During the same time period, other government agencies like the National Science Foundation (NSF) were building their own networks, as were private regional network service providers. These other networks also used TCP/IP as the native protocols, since they were completely "open" as well as readily available on a number of different platforms.
When these various regional and government networks began connecting to each other, the term "Internet" came into use. To "internet" (with a lowercase "i") means to interconnect networks. You can create an internet of Macintosh networks using AppleTalk and some routers, for example. The term "Internet" (with a capital "I") refers to the global network of TCP/IP-based systems, originally consisting of ARPA and some regional networks.
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