The guitar is considered a European-invented instrument that first appeared during the medievel period. The form of the modern classical guitar is credited to Spanish guitar maker Antonio Torres circa 1850. Torres increased the size of the guitar body, altered its proportions, and invented the "fan" top bracing pattern. Antonio Torres' design greatly improved the volume, tone, and projection of the instrument, and has remained essentially unchanged.
At around the same time that Torres started making his breakthrough fan-braced guitars in Spain, German immigrants to the USA - among them - had begun making guitars with X-braced tops. Steel strings for instruments were invented in 1900. Steel strings made for louder guitars, however, the increased tension that the steel strings created did not work with Antonio Torres' fan braced design. Guitar makers, such as Christian Fredrich Martin invented the X brace for the new steel stringed guitar.
History of the GuitarA Brief History of the Guitar by Paul Guy
This is an excellent reference site on the history of the guitar that disputes the more commonly held theory that the guitar descended from the lute and kithara.
Learn guitar with About guide Dan Cross.