It started in traveling carnivals in the 1800s where people would challenge strongmen and could win money if they did not get knocked down; many of these challengers were probably plants. It eventually evolved into a purely spectator thing where all of the matches were fixed and the wrestlers became more over the top or flamboyant characters with fake names like Gorgeous George, to make the shows more exciting . In the 1900s In the US and Canada, a 'territory' system evolved where top promoters controlled small wrestling organizations in different regions of the country, like World Class Championship Wrestling in Texas, WWWF (now WWE) in the North East, and Stampede Wrestling in Canada (still exists).

For a long time the National Wrestling Alliance (NWA) was the main overarching governing body of almost all of these territories. The NWA made the big decisions in what styles of wrestling were allowed, match types, arbitrated the exchange of wrestlers between territories and promotions, and protected pro wrestling from exposure as a fixed sport. In time, some other territorial government bodies rose up to challenge the NWA, most notably the American Wrestling Association (AWA) which was the only one that was ever really a threat to the NWA until WWWF took off.

By the late 70s, The WWWF was the most successful of these promotions and its founder's grandson, Vince McMahon, took it out of the NWA and aggressively waged war against the territories, eventually buying out the AWA. During this time, the wrestling territories would put together 'supercards' which were heavily advertised, inter-promotional, wrestling events. The biggest of these was NWA's 'Starrcade' which became a regular PPV event. WWE answered that with 'Wrestlemania' in 1985 which is currently the longest running annual pro wrestling ppv.

Back then, wrestling shows on TV were usually a hodgepodge of taped matches from different promotions throughout a territory from the past month or so, along with some 'interview's with the wrestlers. These shows acted more as a commercial for super shows or PPVs, or to get people to buy tickets to see it in person. They had very little in the way of on-going feuds or storylines week to week or month to month, but you would see more of that if you went to the live shows regularly. These TV shows also only aired regionally. Vince McMahon of the WWF created the first weekly, nationally-televised wrestling show called 'WWF RAW' in 1993 which was revolutionary in that it worked by like a soap opera with ongoing storylines that progressed week to week and usually culminated in one of the four yearly PPVs.

Meanwhile another NWA territory called Jimmy Crockett Promotions was purchased by media mogul Ted Turner, who turned the promotion into World Championship Wrestling (WCW) which also got its own national weekly TV show. The competition between WCW and WWF created the big wrestling boom of the 1990s which lasted until WCW went bankrupt and was purchased by WWE. The NWA actually also still exists, but is just a small wrestling promotion now, but NWA World Heavyweight Championship is still the longest running pro wrestling championship title, going back to sometime in the 1940s. Today, WWE dominates wrestling in the states like the NWA used to, but there are still some other popular promotions like Impact Wrestling, Lucha Underground, and Ring of Honor.

The answer about wrestling in the 1980s is good information, but I'm going to go a bit further back in time on the development of professional wrestling as we know it today.

Wrestling as we know it grew from wrestling as a carnival attraction in the 1880s. Skilled wrestlers visited various towns and challenged local tough guys to try to beat them on the mat. One of the top wrestlers during this era was William Muldoon, a New York City police officer who learned wrestling in army camps during his service in the American Civil War and the Franco-Prussian War. For years, he moonlighted as a wrestler taking on call comers at a local saloon, until he realized that he could make more money as part of a touring vaudeville show. In 1881, he left the police force and began touring full time, the world's first professional wrestler.

The top wrestlers of this era had legitimate grappling credentials, but even then, most outcomes were predetermined because the wrestlers realized they stood to make more money working finishes than engaging in actual contests. Ticket sales were only a minor source of income; real money was made by convincing fans that a wrestler was sure to win, taking their bets, and then having the other wrestler win.

Wrestling continued in this fashion through the First World War. Matches had predetermined outcomes, but were "worked" to appear indistinguishable from legitimate contests. These matches often lasted several hours, and interest waned because the matches were not exciting to watch.

The first "wrestling promotion" in the modern sense of the term - a stable of wrestlers who toured the country putting on matches for entertainment - emerged in the early 1920s. It was headed by promoter Billy Sandow and wrestlers Ed "Strangler" Lewis and Joseph "Toots" Mondt - the Gold Dust Trio.

Toots Mondt is credited with the idea of putting on performances that combined the most entertaining aspects of boxing and the various wrestling styles into what he called "Slam Bang Western Style Wrestling." The rise of the Gold Dust Trio's style of wrestling-as-entertainment caused ticket sales to become the primary source of income for wrestlers and promoters.

Sources: Jonathan Snowden, Shooters: The Toughest Men in Professional Wrestling (Toronto: ECW Press, 2012); Marcus Griffin, Falls Guys: The Barnums of Bounce (1937; repr. Brookyln: Argos Classic Reprints, 2007)

While most of these comments have focused on WWE as phenomenon unique to America in the 1980's, I want to draw your attention to the first chapter in French literary critic Roland Barthes's 1957 book Mythologies: "the World of Wrestling". In his semiotic analysis of wrestling, you see that many of the character tropes we associate with the WWE were already established in mid-century Europe, though unde different names (the book was published in 1957, but drawn from earlier newspaper columns). Instead of a [heel](https://en.wikipedia.org/wiki/Heel_(professional_wrestling%29), there's a salaud. There are similar roles in Mexican, British, and Japanese wrestling. Rather than thinking of WWE as a development mostly unique to America, perhaps its better to think of it as a survival most common in America (but also, obviously, in Mexico and Japan). There seem to have been a variety of traditional wrestling styles, and I'm not certain, but most things I've read only seem to suggest that this folk wrestling and more performative proto-professional wrestling diverged on the fair circuit in the 19th century, with openly performative wrestling being well established in at least some places sometime in the early 20th century.

I don't have much more to add, I just thought you'd find that Barthes piece very interesting. One interesting thing is in Barthes's piece, the entire story must play out in the course of a single match, drawing on well established tropes. Television enabled the WWE to create longer story lines. That seems to have been one of McMahon's great innovations—taking these storylines beyond what happens around the ring in a match and turning the matches into just one point on a much longer narrative arc. Gorgeous George, for instance, while he was the most popular professional wrestler of the 1950's, reenacted his wedding times in different arenas around the country, something that would be impossible once local wrestling audiences were combined into a single national audience.

The history of entertainment wrestling as a sport really goes back to the 1980s, when what is now known as WWE coined the term to separate themselves from professional, competitive wrestling in front of the U.S Senate. This distinction needed to be made as entertainment wrestling otherwise would have had to follow the same rules as professional wrestling.

There were certain precursors to this, the WWE itself being a part of it since 1952 but that official distinction, as I mentioned, happened in the 1980s.

Was it always fake? Well, yes and no. The storylines mostly are, although there were some real life feuds behind the scenes. Those fake storylines are known as kayfabe. The 1980s saw them emerge, albeit in a more primitive manner than we are used to today. You usually had a good guy, the face, and a bad guy, the heel. Their actions in the ring and during promos (the talking stuff before a match or during an event) would influence their standing with the fans. In the 80s and 90s WWE still operated under the rule that kayfabe cannot be broken and that everything that develops is real.

The 1980s also saw the first real WWE superstars like Randy 'Macho Man' Savage, Rowdy Roddy Piper, André The Giant or even the beloved Undertaker.

The emergence of those intricate storylines, with love interests and different factions within the WWE happened in the 90s during what is known as the Attitude Era. WWE saw a decline in attendance and viewers. The program was just too tame and repetitive for a lot of fans so they switched to other promotions (= wrestling companies) like World Championship Wrestling (WCW) and Extreme Championship Wrestling (ECW). WWE was forced to update their program to capture the zeitgeist and thus, RAW was born with it's signature tagline 'RAW IS WAR'. The Attitude Era was gritty, no-holds barred and introduced a few new formats, such as the Hell in a Cell match, made world famous by the Undertaker and Mick Foley. Factions would build, such as De-Generation X, headed by Shawn 'Heartbreak Kid' Michaels and Triple H.

In a battle for viewers a battle between WCW and WWE started, called the Monday Night Wars, where both promotions competed for viewers in their time slot on TV.

This meant that each week, each promotion had to figure out something new to get viewers to tune in. The storylines got more complicated and could span months or even years, most famously the rivalry between Stone Cold Steve Austin and the boss of WWE, Vince McMahon. Austins persona would usually do something to embarrass or anger Mr. McMahon while the latter would then try to get revenge the following week and as he never quite got it, would turn more and more desperate, eventually resorting to cheating and abuse of his powers as the big boss to get Austin to fail.

At the same time the first baby steps of what is now known as the WWE Divas would take place with female wrestlers like Sable emerging, who was in a love story kayfabe thing with Marvelous Marc Meron. Or Chyna, who belonged to De-Generation X. But unlike in the past, these women were not only eye-candy but actually wrestling.

The whole Monday Night Wars thing ended in the early 2000s with WCW losing out and eventually folding, becoming a part of WWE. As did ECW.

The tradition of the long storylines was continued to this day, as WWE found that they really got the fans involved in the fate of their favorite superstars.

I'm really sorry but I'm unable to answer your question about the PPV, as I'm not really knowledgeable about that.

Sources:

The Attitude Era Vol. 1 (DVD) ECW Unreleased Vol. 1 - 3 (DVD) Undertaker 20 - 0 (Blu-ray) Stone Cold (DVD)

When did the first superstars emerge?

During the 1980s thanks to MTV and Cyndi Lauper.

In 1983, Cyndi Lauper released "Girls Just Wanna Have Fun" that quickly became a smash hit. The grammy award winning music video featured longtime wrestling manager Captain Lou Albino playing as Lauper's father. Lauper would then appear on WWF television being interviewed by Roddy Piper and begin feuding with the sexist Lou Albino. The two would decide to finish their feud by having a woman wrestle on both their behalf, leading to the The Brawl to End It All which had Wendy Richter (Representing Lauper) defeat the Fabolous Moolah (Representing Albino) for the WWF Women's Championship, which was shown live on MTV and ended with Albino and Lauper reconciling their differences, and thus starting the Rock and Wrestling era (or Rock and Wrestling Connection). Months later, Roddy Piper would attack Lauper and Albino on TV, forcing Hulk Hogan to come in and defend Lauper and forcing a title match between Piper and Hogan. They would have their match at another live MTV event called The War to Settle the Score, which ended with Hogan winning, by DQ after being attacked Orndoff and Bob Orton, and Mr T getting involved in the end. This would act as the setup for the main event for Vince McMahon's most ambitious project to date: Wrestlemania.

All of this got the WWF massive mainstream attention due to Lauper, MTVs and Mr. T's mainstream profile. Before then, most wrestling stars were regional heroes whose attention rarely left further than the area their promotion was in (e.g. the Von Erichs in Texas, Bruno Sanmartino in the Northeast). The cross promotion with MTV made Albino into a pop culture icon and help solidify Hulk Hogan ,who had already some mainstream recognition due to appearing in Rocky III, into the most recognizable wrestler in the country. Only devoted wrestling fans in New York would have heard about the Von Erichs, but nearly every kid in Texas had heard of Hulk Hogan.