Today's NERF guns are exceedingly complex, with automatic firing and reloadable dart magazines. But Nerf's eureka moment arose from a decidedly more primitive scene: some cavemen chucking some boulders around an office.
The year was 1968, three years after toy developer Reyn Guyer had begun bending partygoers into pretzels with his smash hit Twister. Guyer had just formed a new toy and game development company called Winsor Concepts, and he and his cohorts were fleshing out a game based on a caveman concept which incorporated the use of foam rocks. One team member started playing volleyball with one of the rocks, and, like cavemen discovering a new use for a simple tool, the team quickly realised that these rocks were their new toy.
The Winsor Concepts group sculpted the rocks down to spheres of various sizes and came up with a series of games that could be played with the balls, chief among them being the initial indoor volleyball game. Milton Bradley, who was enjoying success with Twister, didn't see the promise in the foam balls. Parker Brothers did, though they dropped the prepackaged games and sold the balls individually. They dubbed the product Nerf, after the "non-expanding recreational foam" that off-roaders wrapped around their roll cages, and marketed the 4" sphere as "the world's first official indoor ball".
The Nerf Ball, released in 1970, was an instant success, and nearly four million were sold by the end of the year. It was quickly followed by larger Nerf Super Ball and the Nerfoop, an indoor basketball hoop. The years after that saw the Nerf catalog expand dramatically to include the swords, footballs, and the dart-shooting blasters we know today. [Reyn Guyer and Wikipedia]