They first appeared in windows of homes in ancient Greece. Greece is a dusty, hot country for most of the year and people were always looking for ways to control ventilation and protect their homes from the direct heat of the sun. The first shutters were apparently made with fixed marble louvers and attached to the outside of the house. Naturally, making them out of marble made them very heavy and unwieldy, so before too long the idea came up to switch marble for wood. Wood was easier to work with, less heavy and easier to manipulate.
Before long, fixed wooden louvers were replaced with movable ones, which allowed greater control over how much light entered the room, and allowed for better control of air flow. Another plus with having them movable was that they could also be closed tightly shut when rains or winds were strong, protecting the homes during storms, and opened again afterwards to allow fresh air and light into the room.
Shutters were in common use during medieval times all over Europe. At that time they were built solid, however, and were not louvered. Their prime use was to protect house owners from thieves and robbers as covered windows made it difficult for thieves or the poor to gain entrance into the house. Glass wasn't commonly used in windows till Tudor or Elizabethan times, and even then it was very expensive and used only by the rich. The rest of the population were content with wooden shutters, and as time went by gradually these went from being practical only, to becoming decorative as well. Wooden slats improved air circulation inside homes, and brightened the appearance as well.
With the colonization of America by the Spanish it became common to see Spanish or European styled housing being built. Rich landowners, such as plantation owners, in the South especially, seemed to favour the Spanish style architecture which included putting wood shutters on windows, thus giving rise to the popular name for this type of window covering.
Today shutters are made from a variety of material. Wooden plantation shutters are still some of the more popular ones on the market, often made from either hard wood or basswood. They are also available in vinyl, plastic or faux-wood. Prices vary a lot, depending on the material they are made from with the hard-wood ones being the most expensive of all. Basswood is also a very popular choice especially as the stained wood is very pretty. They are now found in windows all around the world and are no longer restricted to Europe or plantation owners in the South.