Absinthe is a distilled spirit containing wormwood (Artemisia absinthium) and other herbal flavorings that is bottled at a very high proof. The flavor is absinthe is predominantly licorice (from green anise and fennel), but many other herbs and spices can be added. When drunk on its own, absinthe is usually diluted with water poured over a sugar cube through a slotted spoon to bring the drink down to a more manageable proof.
Historically, extracting beneficial chemicals from wormwood was known to the ancient Greeks, but absinthe as we know it was probably invented in 18th century Switzerland. The recipe ended up in the possession of a Major Dubied, who opened the first distillery dedicated to the production of absinthe in 1797. Demand quickly grew, and with his son and son in law (Henry-Louis Pernod), they opened a second distillery in Pontarlier, France in 1805, changing the name of the company to Maison Pernod Fils.
By 1860, absinthe drinking became popular in France, and with the onset of mass production, by 1910, the French were drinking 36 million liters of absinthe per year. Absinthe's popularity reached across all social classes, but was especially popularized by artists. There are many examples of absinthe in the art of the time, including some beautiful advertising posters.
Needless to say, drinking 36 million liters of very high proof spirits a year led to a backlash. With the rise of the temperance movement, stories began to circulate of the hallucinatory powers of absinthe. Murders, debauchery, and insanity were blamed on the la fee verte - The Green Fairy, which fed the common belief that drinking absinthe caused hallucinations. The drink quickly fell out of favor, and was banned in many countries. France banned the production of absinthe in 1914, which led to many producers to turn to making pastis. Absinthe was banned in the United States in 1912. A few countries never got around to banning absinthe, notably England.