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From Wikipedia:
[Source] by Andrew Rilstone.

For entertainment
"Role-playing in the form of historical re-enactment has been practiced by adults for millennia [sic] as well. The ancient Romans, Han Chinese, and medieval Europeans all enjoyed occasionally organizing events in which everyone pretended to be from an earlier age, and entertainment appears to have been the primary purpose of these activities. Within the 20th century historical reenactment has often been pursued as a hobby.

"Another role-playing tradition is the improvisational theatre tradition. This goes back in some sense to the Commedia dell'Arte tradition of 16th century. Modern improvisational theatre began in the classroom with the "theatre games" of Viola Spolin and Keith Johnstone in the 1950's. Viola Spolin, who was one of the founder the famous comedy troupe Second City, insisted that her exercises were games, and that they involved role-playing as early as 1946, but thought of them as training actors and comics rather than as being primarily aimed at being fun in their own right.

Role-playing games
"A role-playing game is a game in which the participants assume the roles of characters and collaboratively create stories. Participants determine the actions of their characters based on their characterization, and the actions succeed or fail according to a formal system of rules and guidelines. Within the rules, they may improvise freely; their choices shape the direction and outcome of the games.

"There are many different types of role-playing games (RPGs). Many, and particularly those that came first, are centered around characters being created in fantasy universes. Of particular note is the advent of such games as Dungeons and Dragons in the 1970's, invented and propagated originally by Gary Gygax and David Arneson. Many different versions of this game were developed, and other types of games were spun-off from this original template, causing what was first developed as a hobby to become a multi-million dollar business venture."

History of RP