A Nutcracker as a wood carving of a soldier, knight, king or other profession has been known at least since the 15th century. It is a carving of a person with a big mouth that is opened by pressing a lever in the back of the figurine. Originally you could insert a nut in the big-toothed mouth, press down and thereby crack the nut. Today's nutcrackers are mostly for decoration.
The carving of nutcrackers as well as religious figures and cribs developed as a cottage industry in forested rural areas of Germany. The most famous nutcracker carvings come from Sonneberg, Thuringia, also a center of doll making, and from the Ore Mountains. Wood carving was usually the only income for the people living there. Today their income is supplemented by the travel industry bringing visitors to the remote areas.
Nutcrackers have become popular in the United States as well and a recreated "Bavarian village" of Leavenworth, Washington even features a Nutcracker Museum. Many other materials were used for the decorated nutcrackers, such as porcelain, silver, and brass, and can be seen at the museum.
Carvings by famous names like Jungbanel, Mertens, Karl, Kolbe, Petersen, Ulbricht and especially the Steinbach nutcrackers have become collectors' items.