Disco started in urban areas, particularly the New York City area, in the early 1970's. Disco is credited as having formally started in 1973, although Manu Dibango's "Soul Makossa" in 1972 might be considered disco.
The whole disco sound is a fusion of Latin beats, Caribbean instruments, soul vocals and European melodies. This sound was further pushed by the addition of synthesized beats.
Disco music was seen, in the early days, as part of a counterpoint to rock music. Rock music was seen as being dominated by white males in the late 60's and early 70's, with Jimi Hendrix and Janis Joplin being some of the few exceptions. Meanwhile, disco divas were African-American females like Donna Summer and Gloria Gaynor.
The New York City LGBT scene was also part of the rise of disco, with homosexual males playing an important part in the rise along with the general increase in sexual liberation. This group tended towards disco as part of the underground scene.
Giorgio Moroder was one of the primary forces behind the disco sound. He frequently collaborated with Donna Summer --- the 1974 track "Love to Love You Baby" is considered to be hugely influential on the disco sound.
Other famous acts include Chic, KC and the Sunshine Band, Gloria Gaynor and the Bee Gees.
The 1977 film "Saturday Night Fever," starring John Travolta, was the turning point in disco history. Not only did it make John Travolta a star, it also brought disco to a much larger audience than the club-goers in urban areas and into every movie theater in the country. This popularity also spurred rapid development and release of new disco artists, which watered down and over-popularized the genre.
The sudden rush of popularity of disco after "Saturday Night Fever" was truly the zenith of the genre. Disco Demolition Night in Chicago was the one seminal event that truly marked the beginning of the end when a near riot ensued in Comiskey Park between games of a double-header when the popularity of watching unwanted disco records exploded overwhelmed the seating capacity of the stadium. Within a year of Disco Demolition Night, disco was no longer at the top of the charts.