This is a pretty popular question and there are several threads in the FAQ that touch on the subject. My own response is summed up in the last one, in particular. If you have any follow-up questions I'd be happy to return to the fray.
Yes it did, and I really hope there is someone on here that has some actual proper sources for it. I've been through all my books on the Aegean world and none of them mention anything else than Troy II, which is hardly enough to describe the whole thing. The best explanation about Troy I've ever gotten was given to me by a professor during my first semester at uni, who is an expert on the Aegean world, so the following is written from my notes from that lecture.
The city of Troy/Ilion was located on the western coast of Anatolia. Archaeologically speaking there were 9 cities in total built on top of each other. Henrich Schliemann, the man who first found and excavated Troy quickly dug through the upper layers down to what is called Troy II and was burned down ~2400-2300 BCE. Because of all the riches and weaponry found there Schliemann assumed that this was the Homeric Troy.
Troy VI has signs of a palisade and a moat that covers the city. Troy VI was destroyed in an earthquake. However, what's most likely to be the real Troy of the Iliad is Troy VII dating to 1275-1240 BCE, when it was burned down. The city had by estimation a population of 5000-10000 people and covered 200 000m².
And now for the mythbusting parts about Troy. The Iliad is taking place around roughly the same time as Troy VII existed, but Troy VII looks nothing like the Troy Homer describes to us. The Troy Homer describes to us is instead the version of it that existed around 800 BCE, that is, during the time Homer lived. The walls are of course greatly exaggerated and were probably not higher than perhaps 3m - an exact height being hard to give since this city too was destroyed at some point. We have no proof whatsoever that Mycenean soldiers participated in the Trojan War.
For some sources see for instance:
Archaeology by Renfrew, C. & Bahn, P. (2008)
Aegean Art and Architecture by Preziosi, D. & Hitchcook, L.A. (1999)
