Roman numerals originated, as the name might suggest, in ancient Rome. There are seven basic symbols: I, V, X, L, C, D and M. The first usage of the symbols began showing up between 900 and 800 B.C.
The numerals developed out of a need for a common method of counting, essential to communications and trade. Counting on one's fingers got out of hand, so to speak, when you reached 10. So, a counting system was devised based on a person's hand.
Meaning of Roman numerals
A single line, or "I," referred to one unit or finger; the "V" represented five fingers, specifically, the V-shape made by the thumb and forefinger. "X" equaled two hands. (See how an X could be two Vs touching at their points?)
Larger Roman numerals developed from other symbols.
M = 1,000 — Originally, the Greek letter phi — Φ — represented this value. It was sometimes represented as a C, I and backwards C, like this: CIƆ — which sort of looks like an M. It's only a coincidence that mille is the Latin word for a thousand.
D = 500 — The symbol for this number was originally IƆ — half of CIƆ.
C = 100 — The original symbol was probably theta — Θ — and later became a C. It only coincidentally also stands for centum, the Latin word for a hundred.
L = 50 — This value was originally represented by a superimposed V and I, or by the letter psi — Ψ — which flattened out to look like an inverted T, and then eventually came to resemble an L.
For the rest of the story: http://www.livescience.com/32052-roman-numerals.html