The style is derived from the Commedia dell'arte which employed a great deal of physical abuse and tumbling. The phrase comes from a device they used composed of two wooden slats which looked like a bat and which, when struck, produced a loud popping noise with very little force. This battacio, or slapstick as it was called in English, allowed the actors to strike each other repeatedly while causing very little actual damage. It was a very early form of special effect.
In recent times, violence in comedy has been decried by many, but many modern films like Lock, Stock and Two Smoking Barrels and Scream combine violence and comedy, not to mention Itchy and Scratchy and it is unlikely that this traditional source of laughs will ever disappear.
Modern comedy films often use elements of slapstick, such as Dumb and Dumber
See also: laughter