F/OSS Comics has a cute cartoon about the origins of Unix and C. If you want a quick précis of the Unix and C histories, this is a good starting point. There are a lot of inaccuracies—at least as I understand that history—but it’s still a good general summary.
By now, most everyone knows the outline of the story. AT&T, MIT, and GE teamed up to develop the Multics system. The project had a lot of good ideas but soon became ensnarled in the complexities of an increasingly complicated system that showed no signs of being completed before the need for it expired. Finally, AT&T management—not Thompson who was, after all, a worker bee engineer—decided the project was a dead end and withdrew from it.
An important part of the story is that AT&T management felt burnt by Multics and had no appetite for another OS project. The AT&T Multics refugees, meanwhile, missed the programmer friendly environment that Multics provided.
Thompson, in an extraordinarily serendipitous discovery, found an unused PDP-7 that everyone had forgotten about and began trying some of his idea on it. One day, he realized he was close to an OS and, again serendipitously, his wife took their son to the West cost to visit her parents. That gave him 3 weeks to come up with what would later become Unix. Because of management’s trepidation’s, the work was essentially a skunkworks project.
Other engineers from CSRC became interested and joined in. It was Brian Kernighan who coined the name Unix as a play on Multics. Unix had a huge number of breakthrough ideas but one of the most important, in the end, was writing the system in a high(er) level language that made it possible for it to be ported to other machines relatively easy. That language was, of course, Ritchie’s C, an extension of the B language.
The F/OSS Comics cartoon captures most of this history pretty well and is worth taking a look at.