From the wiki: One of the first mentions of the automatic writing method used in the Ouija board is found in China around 1100 CE, in historical documents of the Song Dynasty. The method was known as fuji "planchette writing". The use of planchette writing as a means of ostensibly contacting the dead and the spirit-world continued, and, albeit under special rituals and supervisions, was a central practice of the Quanzhen School, until it was forbidden by the Qing Dynasty. Several entire scriptures of the Daozang are supposedly works of automatic planchette writing. Similar methods of mediumistic spirit writing have been widely practiced in Ancient India, Greece, Rome and medieval Europe.
As a Toy:
During the late 19th century, planchettes were widely sold as a novelty. The businessmen Elijah Bond and Charles Kennard had the idea to patent a planchette sold with a board on which the alphabet was printed. The patentees filed on May 28, 1890 for patent protection and thus had invented the first Ouija board. Issue date on the patent was February 10, 1891. They received U.S. Patent 446,054. Bond was an attorney and was an inventor of other objects in addition to this device. An employee of Kennard, William Fuld took over the talking board production and in 1901, he started production of his own boards under the name "Ouija". Kennard claimed he learned the name "Ouija" from using the board and that it was an ancient Egyptian word meaning "good luck." When Fuld took over production of the boards, he popularized the more widely accepted etymology, that the name came from a combination of the French and German words for "yes". The Fuld name would become synonymous with the Ouija board, as Fuld reinvented its history, claiming that he himself had invented it. The strange talk about the boards from Fuld's competitors flooded the market and all these boards enjoyed a heyday from the 1920s through the 1960s. Fuld sued many companies over the "Ouija" name and concept right up until his death in 1927. In 1966, Fuld's estate sold the entire business to Parker Brothers, who continues to hold all trademarks and patents. About ten brands of talking boards are sold today under various names.