Today, it seems that everybody wears a talit katan. Where does this practice come from and when did it start?
The Shulchan Aruch OC 8:3 brings the custom to wear tallis Katan;
טליתות קטנים שלנו שאנו נוהגים ללבוש
Small fringed garments (talit katan) of ours that are customarily worn
The Be’er Hagolah says the source is the Terumas Hadeshen, the Agur, the Maharik and others. This places the custom to at least early 15th century and probably a bit earlier.
My understanding was that tallis katan orginated because in the past the type of clothes people typically wore had corners on them and therefore required tzitzis. Once clothing styles changed and people were not longer wearing clothes that required tzitzis the Rabbis didn't want the mitvzvah to be ignored so they made a Rabbinic ruling to go out of your way to pro-actively wear a garment that requires tzitzis.