What caused the guitar, an instrument not found in a typical orchestra, to become the de-facto popular music instrument?

An extended 12" remix of a previous answer:

Firstly, one thing to remember about 'most popular music bands ranging from as far back as the forties' is that popular music generally reflects the times, in various ways, not least because it thrives on what is perceived as novelty, but also because the people buying popular music are young, and have grown up in a society that values particular things over others. And Charlie Gillett makes the argument quite strongly in the book The Sound Of The City that rock'n'roll - the dominant music of the second half of the 20th century - is, well, the sound of the city - a place full of mechanisation, loud vehicles, a place hooked up to the electricity grid, a bustling place crammed full of people. The city is a place where you have to fight to be heard, where you have to be loud to stand out.

And so, unsurprisingly, one defining feature of the majority of typical rock instrumentation was that the instruments were just loud, and that they were relatively new technology.

Take the modern drum kit. Drums have obviously been around since time immemorial, but the idea that one person might sit at a kit of drums and play them in combination was relatively new in 1940. The kit was derived originally from the need for sound effects to accompany silent films played in theatres. These early drum kits were modified and eventually crafted into something that looks like a modern drum kit in the 1930s by jazz drummers like Gene Krupa. The British rock'n'roll drummers of the 1960s very commonly had a background in jazz; Charlie Watts of the Rolling Stones famously prefers jazz to rock'n'roll - and their drumming techniques and ways of playing are very much based on the styles of drummers like Krupa, who singlehandedly (or, more accurately, doublehandedly and doublefootedly) provided the rhythm that propelled the dance music that was swing jazz.

Where the drum kit is still loud enough to be put in a room of 200 people dancing and not really need much amplification to be heard, the same can't quite be said for the guitar - acoustic guitars just aren't that loud. The rise of the electric guitar was based upon the desire of guitarists to be heard in larger rooms (George Beauchamp, who played a role in inventing the resonator guitar and the electric guitar, was a guitarist making Hawaiian music who very much wanted his instrument to be louder). While electricity was common in cities decades before, amplification technology was still relatively new in 1940; speaker technology - e.g., what's used in a guitar amplifier - effectively dates from 1921, while the first commercially produced electric guitar that was designed to be amplified, the Ro-Pat-In 'Frying Pan' was patented in June 1934.

Additionally, the 1930s saw a revolution in singing styles, where singers like Bing Crosby no longer had to project their voices like opera singers to be heard in a large room; they now had microphones conveying their voices over amplifiers. This radically increased the kind of singing styles that you could use in a large room, and Bing Crosby and Frank Sinatra and others exploited this to the max with their 'crooning' style, which was notable for its softness (and which was criticised as unmasculine compared to more operatic styles at the time), and which was possible entirely because of amplification. So in the 1930s, you have a situation where a singer who hasn't been trained in opera (and how to sing with singer's formants) can actually be heard over a large, loud live band.

Previous to the 'Frying Pan' guitar, guitars were often a part of swing jazz bands, but the relatively quiet volume of an acoustic guitar (in a largely unamplified band revolving around a large horn section) meant that the acoustic guitar was largely a rhythm instrument. However, an electrified guitar allowed jazz guitarists like Charlie Christian towards the end of the 1930s to actually play solos on the guitar which could be heard by the audience. Electric guitars thus spread through genres like jazz and rhythm & blues in the 1940s and 1950s because of their versatility - you could use them to play rhythm parts or lead parts (or in the case of Jimi Hendrix in the 1960s, both at the same time). This, perhaps paradoxically, also increased the popularity of the acoustic guitar in comparison to other acoustic instruments, as it was a direct comparison, semiotically, with the electricity of the guitar; it thus became the big instrument of the folk music boom of the 1950s and early 1960s.

The electric bass guitar (i.e., the one that looks like a slightly bigger electric guitar, held like a guitar), as opposed to the acoustic upright bass (the one that looks like a big violin that's often taller than the person playing it, held upright), first went into production in 1951 (the Fender precision bass). Bill Black in Elvis Presley's band, for example, switched to electric bass in 1957.

Finally, electrified keyboard instruments gained prominence in the 1950s as well and have been more than a niche part of popular music, I would say, if not having quite the same kind of prominence as the guitar or the drums. The Fender Rhodes electric piano and Wurlitzer electric piano functioned on similar principles to an electric guitar, except with hammers hitting metal tines rather than plectrums hitting metal strings. The Wurlitzer went into production in the mid-1950s, and Leo Fender of Fender Guitars partnered with Harold Rhodes to mass-produce Fender Rhodes keyboards from 1959. Ray Charles prominently used the Wurlitzer electric piano on his 1957 hit 'What'd I Say'. On early Beatles recordings, a Hohner Pianet - a similar instrument made by the German company Hohner - was often played by George Martin to subtly supplement the rest of the band. I discuss the use of the electric organ in 1960s pop music in much more detail here but in general, electric organs are also similar to electric pianos and electric bass guitar in that they came to prominence in the late 1950s.

This line-up of instruments - guitar, bass, drums, maybe piano or electric keyboards - developed in R&B in the 1940s and 1950s, often in bands attempting to emulate swing line-ups of various sorts. Bill Haley & The Comets had originally been a western swing band, while Ike Turner & The Kings Of Rhythm was an offshoot of a more straight-ahead swing big band; these musicians were attempting to emulate a big band with a smaller line-up using louder instruments. This line-up became codified as the standard in the 1960s, in particular because of the sheer success of groups like the Beatles, the Beach Boys, the Rolling Stones, and Bob Dylan. All of these line-ups basically used line-ups comprised of these instruments, perhaps supplemented by others (e.g., the Beatles using a symphony orchestra on 'The Day In The Life', the Rolling Stones using a children's choir on 'You Can't Always Get What You Want', and The Beach Boys using bass harmonicas and French horns amongst other things on Pet Sounds).

Guitars and electric keyboards are both versatile instruments with a reasonably large range of available pitches, where one musician is capable of both rhythm and lead parts which can both be heard by the audience. In comparison, a single saxophone (also a very common instrument in popular music since the 1950s) only allows for a single melody line rather than chords doing rhythm parts. Swing bands do show the full capability of saxophones and trumpets to do rhythm parts, of course, but this requires a relatively large horn section.

Of course, finally, I'd take issue with your contention that the guitar is currently the de-facto popular music instrument. Because it's not. Synthesisers and drum machines really become a dominant part of popular music in the late 1970s and 1980s, the period when the computer started to become part of everyday life, the way that electrical goods had become part of everyday life earlier in the century. Much modern popular music very often doesn't include electric guitars, electric bass, acoustic drums, or acoustic/electric keyboards at all. The current #1 single as you read this is all electronic and computerised, made on digital audio workstation programs on computers (e.g., Ableton, Logic, or ProTools) using digital samples and keyboards that - like the computer keyboards I typed this on - essentially input data to be processed by computer algorithms.

However, such music also very often uses the logic of the modern band instrumentation, with a rhythm part usually conceptualised in similar ways to a drummer playing a drum kit, a bass part that's a single melody line, instruments playing chords in a rhythmic way, and lead lines (and vocals). But then this logic isn't dramatically different to the logic of the swing band, either - it just requires less people to carry it out thanks to advances in electricity and then in electronic music. So where Duke Ellington's big band used fourteen members, a modern electronic act can just be one person.