The history of tools really began long ago, but became famous with Unix. Unix tools like grep, awk and make where meant to be combined flexibly with pipess.
Tools were originally simple and light weight. As some tools have been maintained, they have been integrated into more powerful integrated development environments (IDEs). These environments can make searching and editing much easier, however they lack the ability to massage code, like old Unix tools.
The distinction between tools and applications can become murky. For example, developers use simple databases (such as a file containing list of important values) all the time as tools. However a full blown database is usually thought of as much more than a tool.
Software tools come in many forms: