As an old guy who's been around computing since 1950, I'm often asked about early history of computing. I appreciate efforts to capture some of our history, and try to contribute when my agin memory doesn't play tricks on me.
Back in 2003, Craig Larman and Victor R. Basili compiled an interesting article, Iterative and Incremental Development: A Brief History. I made several contributions to their history, but they did much, much more. Here's a small sample of what I told them:
We were doing incremental development as early as 1957, in Los Angeles, under the direction of Bernie Dimsdale [at IBM's Service Bureau Corporation]. He was a colleague of John von Neumann, so perhaps he learned it there, or assumed it as totally natural. I do remember Herb Jacobs (primarily, though we all participated) developing a large simulation for Motorola, where the technique used was, as far as I can tell, indistinguishable from XP.
When much of the same team was reassembled in Washington, DC in 1958 to develop Project Mercury, we had our own machine and the new Share Operating System, whose symbolic modification and assembly allowed us to build the system incrementally, which we did, with great success. Project Mercury was the seed bed out of which grew the IBM Federal Systems Division. Thus, that division started with a history and tradition of incremental development.
All of us, as far as I can remember, thought waterfalling of a huge project was rather stupid, or at least ignorant of the realities… I think what the waterfall description did for us was make us realize that we were doing something else, something unnamed except for "software development."
Larman and Basili's article has a whole lot more to say, and as far as I know, is an accurate history. I strongly recommend that all in our profession give it a good read. We should all know these things about ourselves.