The dobro was invented by John Dopyera in the early 1930s. Dopyera and his brother struck out in the late 20s in search of a way to create a louder guitar. The brothers called their new company Dobro, which meant good in their native language.
Dobros sound more like banjos than guitars, because of the effect created by the metal strings played over the metal plate. This is employed even further by players who use a metal slide (rather than fingering chords with their fretting hand, the way an acoustic guitar player does).
There are 2 types of dobros: squareneck and roundneck. Roundnecks are typically played in Blues music. Squarenecks, preferred by Bluegrass players, have strings that measure 1 cm off the fret board, and are played on their backs with the strings facing up. In contrast, roundnecks are held like a guitar.
The dobro was introduced to the Bluegrass line-up in the 1950s by Josh Graves (Flatt & Scruggs), who used the Scruggs picking style on the dobro, which is still the way it is popularly picked. Bluegrass players typically tune their dobros to GBDGBD, although some dobro players veer to other alternate tunings.