The first primary was in Oregon in 1910, pushed by the Progressives. In the early 1970’s is when the Democrats really moved to more primaries and then the Republicans followed.
Below is an interesting article written after the failed 2012 election and goes into the history, problems, and some possible solutions.
My summary of the article: The long nomination process leaves our contender bruised, bloodied and broke before the Main Event even begins.
http://www.nationalaffairs.com/publications/detail/a-republican-nomination-process
Back room deals?