What is the history of the invention of paper?

Papermaking began in China in the second century AD, and spread along the Silk Road. Prior to this, various civilizations used what was available to write on: papyrus made from reeds in Egypt, parchment and vellum made from animal skins in Europe, tree bark in the Americas, etc.

The Islamic world embraced paper in the 8th century and built mills for mass production, although vellum was still preferred for important books.

The makeup of paper stayed much the same for centuries--mostly rag with some plant material--while the methods of production improved. In the 19th century, steam-powered paper mills using exclusively wood pulp were developed in France and England. Because this coincided with advances in printing, the introduction of the fountain pen, and the availability of mass-produced pencils, this led to a transformation in the economy and society as books and newspapers became readily available at reasonable costs.

Eventually it became apparent that the acidic nature of wood pulp paper made it disintegrate over time (natural lignin also causes significant yellowing). Acid-free paper is now used for longer-lasting materials, but the rag paper invented thousands of years ago is still more stable.