The public tender
The need for a go anywhere reconnaissance vehicle was being felt by the Army since World War I and this promoted the appearance of several proposals over the years. After several tentative versions the specifications laid down by the Quartermaster Corps, on July 7, 1940, called for: 
1. A driving front axle with 2-speed transfer case including provisions for disengaging the front axle drive. 
2. A body of rectangular design with a folding windshield and 3 bucket seats. 
3. Increased engine power (presumably in respect to the Belly-flopper prototype). 
4. Means for towing. 
5. 30-caliber machine gun mount. 
6. Blackout lighting. 
7. Oil-bath air cleaner. 
8. Hydraulic brakes. 
9. Full floating axles. 
10. Wheelbase of 80". 
11. Maximum height of 40". 
12. Maximum weight of 1275 lbs. 
13. Approach and departure angles of 45 and 40 degrees, respectively. 
14. Must reach 50 mph on hard surface. 
15. Special bracing for a pintle hook setup. 
16. No aluminum to be used for cylinder head. 
17. At least 4 cylinders. 
18. 8 of the 70 vehicles to made had to be four-wheel-steering. 

Ford, American Bantam and Willys-Overland answered the call.
Bantom built the first Jeep in 1940. It was the Bantam Pilot (BRC-60).
Seventy of these units were produced.
Ford produced two units called the PYGMY.
In 1941 they produced 3700 units called the Ford GP
Willys produced 1553 Model MA s
From there the rest is history.

The name Jeep also has an interesting story to it.
The first coinage of the word "JEEP", as applied to a motor vehicle, occurred during WWI. According to Major E.P. Hogan, who wrote a history of the development of the Jeep for the Army's Quartermaster review in 1941. The word "Jeep", he wrote. "is an old Army grease monkey term that dates back to WWI and was used by shop mechanics in referring to any new motor vehicle received for a test." Jeep was still used in Army motor pools well into the 1930's as general purpose or "GP" for short. Though in a 1941 Army manual it refers "GP" as Government 80" wheel base car (Jeep). 
Before then in 1936, the term 'Jeep' was it introduced to the world by a Popeye comic strip character, "Eugene the Jeep". The only words Eugene could say were "Jeep, Jeep", and "GP" then became "Jeep". Then the "Willys Quarter-Ton Jeep was 1st used by the U.S. military in WWII. When the WWII Jeep was issued during wartime, the term "Jeep" was here to stay.

In 1970 AMC (American Motors Corp.) bought Jeep from Kaiser.
AMC brought out the CJ 7 and put a V8 in the Jeep. They also went against the trend for this type of vehicle and offered a automatic transmission.
They also gave us the Sporty 2 door Full Size Jeep Cherokees and the family Wagoneer station wagon and to top that off they brought out the smaller 2nd generation Cherokees.
In 1984 the down sized Cherokees appeared. It received a great power increase in 1987 with the introduction of the inline 4 Liter engine.
This success story lasted until 1987 when AMC went out of business and the Jeep was 
acquired by Chrysler Corp.

A further note to the history of the Jeep was provided by Rodney Hawk of Butler, Pa..
" The American Bantam Car Works of Butler, Pa answered the call of the army and designed and successfully tested and demonstrated the jeep for the Army.  Willy's Overland and Fords entries did not meet the Army's specs.   American Bantam had a very limited production capacity so the army took Bantams entry and gave it to Willy's and Ford to produce.  Unfortunately there was no recognition or compensation for American Bantam and the company shortly went bankrupt.'
To read more about the American Bantam Car Works click on the link below.
Rodney also provided me with two web sites that tell the real story about the Jeeps beginnings.

Note the one piece windshield