The ocarina is a very old instrument, believed to date back some 12,000 years. It is of particular importance in Chinese and Mesoamerican cultures (where they are often shaped as animals, many times birds). Its common use in the West dates to the 19th century, when the modern form of the ocarina was invented by Italian Giuseppe Donati. The name is derived from Italian (ocarina="little goose", for the instrument's resemblance to the animal).
The ocarina is a closed-pipe instrument, which gives it the unusual quality of not relying on the pipe length to produce a particular tone. Instead the tone is dependent on ratio of the total surface area of opened holes to the total volume enclosed by the instrument. This means that, unlike a flute or recorder, the placement of the holes on an ocarina is irrelevant -- merely their size. As a closed instrument, it is also incapable of creating harmonic overtones.
Different notes are produced by fingering the holes, opening and closing more or less of the total hole area. The tone is then produced through the sound hole. The tone can also be varied by changing the strength with which one blows through the instrument.
Ocarinas are experiencing a slight surge in popularity recently (2002) due to the release of a popular game for the Nintendo 64 entitled Legend of Zelda: Ocarina of Time in 1998, in which the hero Link used the instrument to travel through time and magically manipulate his environment.