Jimmy Wales , Wikipedia's founder, started Nupedia which is a project similar to Wikipedia and had the goal of being an online encyclopedia, See Interview with Jimmy wales.
After sometime Nupedia only had 25 approved pages as the editing process was so slow and strict.
Jimmy wales thought the Wiki model , where any person can write or edit, might work if applied to a new encyclopedia, See why people contribute to free sites.
According to Wikipedia the site was started in 2001 by Jimmy Wales and Larry Sanger.
In 16th January 2001 Jimmy Wales made the first Wikipedia Entry. It was 'Hello World'
Wikipedia grew very fast as a result of Google's traffic and by may 2001 it had 3,900 articles, See Why Wikipedia is losing Google traffic.
In around March 2001 Wikipedia started including articles from other languages such as German and Japanese, See why we Speak different languages.
After one year Wikipedia has around 20,000 articles.
As a result of the dot com crash Larry Sanger left Wikipedia in March 2002.
By 2003 the English section of Wikipedia bypassed 100,000 articles.
By the End of 2004 Wikipedia had more than 1 million entries in 100 different languages.
As Wikipedia kept growing by 2010 it celebrated 1 billionth Edit, See Why Wikipedia is non profit.