This popular stage art's history goes back around 1920. Using well-known songs of the era in different plays is considered to be the kickstarter. Those plays are also enriched by monologues, witty references and poetic criticisms on different subjects.
The first example of the modern musical is thought to be "Show Boat" from 1927. As soon as it's public, Show Boat is loved by masses and it shaped the musical culture afterwards.
Broadway is the name when you speak of musical. It refers to a specific location in United States, and cradle of still globally popular pieces like "Oklahoma", "Carousel", "South Pacific" and "The King and I".
Most of the popular musicals of Broadway are adapted to Hollywood.
There are many other significant plays like "West Side Story" - a musical which is adapted from the good old "Romeo and Juliet". But everything has to evolve and so did the musical culture. After the play "Hair", subjects that are considered as "immoral" or "unorthodox" started to be seen more often in new scripts.
As of 80's and 90's, Europe had a great time with musical pieces - especially with “Lés Miserables”, “Phantom of Opera” and “Cats” and towards the end of 90's, Disney started including musicals in its animated movies.
The iconic “Beauty and The Beast” is a good example of these, which is produced with the help of legendary Elton John.
Unfortunately, due to high demands of a good quality musical, this beautiful performance art became more and more harder to put in practice and is not as popular as it used to be.