Early cases of this practice go back to the Nazis, who regularly stole prints of American movies from European countries during their Blitzkrieg raids. They would then either cheaply reanimate the movie (see Hochzeit im Korallenmeer), or they would change the names in the credits (like with Max and David Fleischer's cartoons).
As theatrical movies began to air on television, networks successfully sought permission to receive shortened versions of movies. This cut out scenes or sections of movies, in order to provide a length short enough to fit in normal television half-hour-based time slots.
At the start of the 21st century, some small companies began selling copies of movies, without the violent, indecent or foul language parts, to appeal to the family audience. By 2003, Hollywood reacted against these unauthorised modifications, as it considered them to be a destruction of the filmmakers work, and a violation of the controls an author has over her works. Famous movie heads like director-producer Steven Spielberg publicily bashed this practice in magazines.
Less controversial than editing movies were the rise of director's cut editions of movies, which flourished with the advent of DVDs. These restore scenes to movies which had been shortened according to the reactions of test audiences.