The very first appearances of augmented reality happened in the late 1960s and 1970s. Ivan Sutherland is credited with creating the very first head mounted display, which was introduced at the University of Utah in 1968. 
First Head Mounted Display
In 1975 Myron Krueger creates Videoplace that allows users to interact with virtual objects for the first time.  The term augmented reality wasn’t really established until the early 1990s when the two Boeing employees Tom Caudell and David Mizell used the term to describe the extension of the range of view with work-specific information, which was done with a heads-up-display (HUD). The 1990s marked an important period for augmented reality, as several factors, such as the development of mobile computers and smartphones with more and more efficient hardware. In 1997 the first mobile augmented reality system (MARS) was developed at the Columbia University in New York. The system used GPS data to display information on a head-worn-display to show more information about the building and the campus to the person wearing it. The calculation power came from a laptop which was carried on the back. First Mobile Augmented Reality System
After the year 2000 the amount of augmented reality application increased drastically in several industries. The first augmented reality browser for smartphones, Wikitude, was introduced in 2008. Since then the development of new augmented reality apps and games has increased, also thanks to the breakthrough of the iPhone. In 2014 wearable augmented reality makes headlines thanks to Google Glass. Since then augmented reality has spread and more and more apps are being developed. 
This post describes important milestones in the development of virtual reality (VR). Of course these milestones are not concluding, but these milestones are important in the development of the Virtual Reality.
The Sensorama (1962)
In 1962, Morton Heilig built a prototype of a multi-sensory theater. This theater was called Sensorama and was able to play five short movies. The movies were displayed in a wide-angle view and provide body tilting. Additional it supplied stereo sound and the use of aromas (tastes). So the Sensorama was the first passive virtual reality machine. Unfortunately, the Sensorama was not a financial success story, so the Sensorama was built only once. 
In 1963, the computer scientist Ivan Sutherland wrote the first interactive computer program named Sketchpad. This program was a pioneer of today’s computer-aided design (CAD) programs and it was a major breakthrough in the evolution of computer graphics and human-computer interaction. Sketchpad was the corner stone for graphical user interfaces in our today’s personal computers. 
Here is the link to the technical report of the Sketchpad program.
Head mounted display: The Sword of Damocles (1968)
The first virtual and augmented reality head mounted display (HMD) was called “The Sword of Damocles”. It was also developed by Ivan Sutherland in 1968, with the help of one of his students, Bob Sproull. The unit was bulky and extremely heavy, but it has a binocular display and was able to display a computer-displayed perspective view of a room or a cube. 
Here is the description of the “Sword of Damocles”.
The term “Virtual Reality” was born (1982)
It is not exactly known if the term “Virtual Reality” and his meaning was used for the first time in the science fiction novel “The Judas Mandala” written by Damien Broderick in 1982. But only five years later, in 1987, the term “Virtual Reality” was registered in the “Oxford English Dictionary”. 
Cave Automatic Virtual Environment (1992)
The Automatic Virtual Environment (acronym CAVE) was firstly presented in 1992. The Cave was a room-size visualization solution, where projectors creates on the different walls in a room a virtual 3d environment. The CAVE technology can be used for example in flight simulators or supports architects to visualize their constructions. The construction of a CAVE system remembers partly on a Holodeck from the science fiction movies Star Trek. 
Nintendo Virtual Boy (1995)
The first portable head mounted console which are able to display true 3d graphics was the Nintendo “Virtual Boy”. It was released in 1995 and persisted of a head mounted display (HMD) and a controller. The display color was only monochrome, because Nintendo uses only rad LED’s. Other LED’s were at this time not efficient enough. Unfortunately, the Nintendo Virtual Boy was not successful, because there were only a five game titles which supports this new hardware. On the other hand, at this time, there were others game consoles on the market, like the Sega Saturn or the Sony PlayStation. So Nintendo sold only almost 77’000 pieces of the Virtual Boy. 
The Matrix Movie (1999)
In 1999 the movie “The Matrix” hits theaters all over the world. The movie says that the human beings live in a virtual world, controlled by machines. With this movie, the topic of virtual reality is better known by the mainstream. 
Virtual Reality Head Mounted Display (2000)
In the year 2000, the US company Micro Vision developed for the US AirForce a HDTV head mounted display with a resolution of 1920×1080 pixels. 
First Data Glass from the Fraunhofer Institute (2009)
In 2009, the Fraunhofer Institute in Dresden presented the first data glass. This data glass contains an Eye-Tracker CMOS chip, so the glass knows where the eyes are looking for. The data glass can display information on the two screens and can give in that way the right information to the wearer. 
Google introduced Google Glass (2012)
The US internet company Google introduced in 2012 the optical head mounted display (OHMD) Google Glass. This glasses are combined with a small computer. The wearer communicates with the glass via voice, the wearer talks to the Google Glass. One year later, in 2013, Google started selling a prototype of Google Glass to qualified “Glass Explorers”. Also one year later, in 2014, Google started to sell the Google Glass to the public. Of course, the Google Glass or other Data Glasses belongs more to the topic of augmented reality instead of virtual reality. But these glasses are very close to the use of head mounted displays HMD. 
Facebook buy Oculus VR (2014)
Oculus VR, simply know as Oculus, is a virtual reality technology company from California in the united states. The company was founded in 2012 and developed, with the support of a Kickstarter campaign, the virtual reality head mounted display Oculus Rift. In 2014, Facebook acquired Oculus for $2 billion and in 2015, Oculus partnered with Samsung to develop the Samsung Gear VR. 
Microsoft introduced HoloLens (2015)
In 2015, Microsoft presented together with Microsoft Windows 10 his new Data Glass HoloLens. This HoloLens beds 3d holograms into the real world. It also an augmented reality Glass. But it shows, where we are going in the future: The borders between reality and virtual object disappears little by little.