Legacy (along with Vintage) is considered an eternal format because the card pool never rotates. This means that all the sets that are currently legal will continue to be legal and any new sets will automatically be included in the legal card pool. (Except of course for cards on the banned and restricted list)
It evolved from Type 1.5, a format defined by a banned list that merely consisted of all banned and restricted cards in the old Type 1. In 2004, the format was revitalized by separating the banned list from the rechristened Vintage and banning many old, powerful, and expensive cards such as Mishra's Workshop, Mana Drain, and Bazaar of Baghdad. The result is that Legacy has a lower power level than Vintage, which makes for longer games, and is considerably more affordable. The DCI has attempted to promote the format with the addition of a Legacy Grand Prix circuit. In 2007, the company announced that this format had selected for the final individual portion of the World Championships prior to the fixing a problem that they had made after moving the championships from summer/fall to fall/winter.