System of files called .txt indicates text files. These files contain almost no formatting like italic, bold, etc. He also doesn´t carry the information about coding format, which leads to minor problems upon displaying files. Sometimes there can be used light formatting like font size. Today is formatting ability increased enough, so you can use italic, bold, underline or curve. Text can contain formatting tags, for example you can use HTML tags or some parts of programming languages.
Format .txt is one of the most versatile and general file, because it can be read in almost every program allowing text displaying. So you can open them in common Notepad or in Microsoft Office Word.
Its release is not surely determined, but the beginning of it goes back to punch cards, which were use in first half of 20th century. To open these files you can use Notepad, Notepad++ or Microsoft Office Word.