The history of ouzo is somewhat murky, but some claim it may date back in one form or another to ancient times. Its precursor is raki, a drink distilled throughout the Byzantine and later Ottoman Empires, often in those days of quality approaching moonshine (similar liqueurs in Turkey and many Arab countries still go by that name).
Modern ouzo distillation largely took off in the 19th century following Greek independence, with much production centered on the island of Lesvos, which claims to be the originator of the drink and remains a major producer. In 1932, ouzo producers developed a method of distillation in copper stills, which is now considered the canonically proper method of production.
In modern Greece, ouzeri can be found in nearly all cities, towns, and villages. These cafe-like establishments serve ouzo with mezethes -- appetizers such as octopus, salad, sardines, calamari, fried zucchini, and clams, among others. It is traditionally slowly sipped (usually mixed with water or ice) together with mezethes shared with others over a period of several hours in the early evening.
In many areas, individuals or small-time local producers make tsipouro, which is essentially a home-made small-batch variant of ouzo. The taste of tsipouro varies widely by producer, but many Greeks prefer their favorite local tsipouro to the more commonly-available brands of mass-produced ouzo. The traditional hospitality greeting for travellers visiting the monasteries at Mount Athos is a small glass of tsipouro and a loukoumi, a candy-like homemade treat.