Garlic bread as currently known in N. America and Europe derives from bruschetta, bruschetta being an Italian tradition of toasted bread with garlic and olive oil.

Bruschetta is typically a thick, rustic cut of bread that is toasted then brushed with a cut clove of garlic and drizzled with extra virgin olive oil. Salt is usually, but not always, added. Alternately, the bread can be oiled before toasting. Bruschetta is first attested to in books dating to the 1600s.

Garlic (along with mustard) is one of the oldest flavorings used in food in Europe, going back to at least the neolithic, but it is used less in traditional Italian cuisine than it is in Italian-American cuisine. The pairing of bread and olive oil, without garlic, is a tradition in Italy that can be traced back as far as the Roman imperial era. Tradition has it that makers of olive oil used bread to taste test fresh-pressed oil.

Garlic bread or garlic toast is believed to have originated with Italian immigration to the United States. Olive oil was an uncommon commodity in the US until the mid-20th Century. Instead, the US had a strong tradition of using butter on toast, stemming from cultural roots in the north of Europe. Butter was likely used in place of olive oil for simple reasons of availability, and, with the opening of Italian American restaurants, butter will have better suited the American palate.

An ngram search indicates the first cook book to describe garlic bread was Sunset, published by Southern Pacific in 1934. It gives a recipe for San Diego Special Garlic Bread. The text states, "there are many types of so called garlic breads, but this one is better tasting than any of the others," suggesting that garlic bread was already well known, if not well written about, in 1934.

Edit: Regarding popularity, ngram book references show a steady increase from 1970 to 1995 representing an approximate ten fold increase in references to the buttery garlicky snack. References peak in 2003 and have shown a slight decline thereafter. Garlic toast shows a similar trend. In other words, we have passed peak garlic bread.