Literally translated, Manga means "random (or whimsical) pictures". The word was used in the 19th century with the publication of Hokusai Manga, containing assorted drawings from the sketchbook of the famous ukiyo-e artist Hokusai. However, manga-like drawings emphasising narrative and using simple lines can be traced back to the 12th century. Modern manga developed from a mixture of this native tradition and imported ideas from western style comics ("Japan Punch", modelled on the British satirical magazine, was published in Yokohama from 1862).
Unlike the US comic industry, Manga was never effectively censored. Its US counterpart was the subject of a moral panic in the mid-1950s and neutered itself by introducing self-regulation banning the "portrayal of sex, violence, and antisocial activity" (1954, US Comics Code Authority) in comic books. The number of comic titles immediately dropped by 50 per cent and the industry never fully recovered. It had effectively limited itself to a non-adult audience.
Meanwhile, manga thrived. Its presiding genius from the 1940s onwards was Osamu Tezuka.
The manga market now accounts for about a quarter of all magazine and book sales in Japan, reaching readers of all ages. Circulations for manga magazines can be huge. Shounen Janpu has a weekly circulation of 5-6 million (for reference, Time magazine sells about 4 million). Manga books also sell in massive numbers. They often have first print runs in excess of 2 million ("best-seller" status in the non-manga book business is earned by selling more than 100,000 books). Some of the best selling publications in history have been manga.
For more info: Wikipedia manga entry