Originated as a method of packing fish with rice to preserve the fish. As it fermented, the rice produced lactic acid, which pickled the fish and kept it from spoiling. During this time, it was called, "nare-zushi" in which only the fish was eaten, and the rice was thrown away.
Because "nare-zushi" took anywhere from 2 monthes to 1 year to prepare, Dr. Matsumoto Yoshiichi had the idea of adding vinegar to the rice-reducing the time it took to prepare.
Then in 1824, Hanaya Yohei had the idea of placing fresh raw sliced fish on small fingers of vinegared rice. He became very popular with his new method that he opened a sushi stall in town.
Sushi, back then was more of a snack, than a meal. The stalls were on wheels and they were hauled around into certain areas. Sushi stalls disappeared after World War II and were moved indoors. Tradition was that the chef sat and the customers stood and ate what he prepared. During the 1960's, the chef began to stand while he let his customers eat while sitting down.