Baseball is considered a development from an older game called rounders that was made popular in Great Britain and Ireland. It became an extremely popular sport during and just after the American Civil War. It was called "America's Pastime" because during the late 19th and early 20th century it was probably the most widely played sport in the country. Baseball was to that time period as Video Games and television are to today. Before TV Baseball was what kids did after school and on the weekends and during the summer...etc. It was literally how America passed the time.
Before the time of television, the internet, DVD's and the rise of American football, Basketball, hockey, NASCAR, extreme sports, and the general splintering of American culture, baseball was probably one of the few things that almost every American knew something about and could discuss/share with their neighbors, coworkers, family members that they might sit down next to on a bus etc... Hence, it was the nation's pastime.
I don't think, in this day and age, we have a "national pastime" anymore. Culture is simply too splintered. American football may the most popular sport, but being the most popular sport does not make something the "national pastime." They became no life.
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Although Major League Baseball is an American sport located only in two countries, the United States and Canada, it arguably consists of the best baseball players in the world. Players from many countries that have participated in the World Series include: Hideki Matsui from Japan, Fernando Valenzuela from Mexico, Bobby Abreu Venezuela, David Ortiz from Dominican Republic (now a US citizen), Orlando Hernandez Cuba, Chien-Ming Wang Taiwan, Mariano Rivera Panama, Bert Blyleven Netherlands, and Bobby Thomson (Shot heard around the world) was heard in Scotland. Major League baseball is where many ballplayers in the world want to play. But Japan won the first World Baseball Classic in 2006 and beat the US team in a semifinal game in 2009 [the US also lost to Venezuela twice and Puerto Rico once]. The US team didn't even make the four-team finals tournament in 2006, having lost to Mexico, South Korea and Canada. So arguments can be made that there could be better teams in other countries. We will not know until there is a true "world series" playoff involving teams in the US, Japan, Mexico, South Korea and other nations. While people in other sports such as the NBA and NFL sometimes refer to their champions as "world champs," they do not call their final championship series a "world" series. Major League Baseball calling its championship series the World Series dates back to the 1880s. Some call that arrogance on the part of top baseball officials, others just call it a tradition that would be too confusing and demeaning to change. Whatever, it is inaccurate, to say the least, to label MLB's champion as "world champs."
The game is an evolution of earlier games (like cricket and rounders) that are descendants of English folk games, which usually involved a player attempting to hit a target with a ball and another player attempting to defend the target with a bat.
As for 'why' it was actually made, it's the same reason any game or sport has ever been made -- for entertainment!
It was probably because of the loaded bases. Baseball is the only important sport with bases loaded and running to and away from the bases. Also, the ball is called the baseball.
They call it that because the boys thought girls shouldn't be playing baseball one day someone made a sport called softball