Tor (The Onion Router) was created as a way for people to maintain anonymity on the Internet. The main way it does this is by routing messages through a network of servers in such a way as to conceal any and all usages of the Internet.
The onion routing facility is actually a description of the various layers of the service as data is encrypted in several layers and sent to further destinations where it is further encrypted. The original version dates to September 2002 when the facility was still called The Onion Router, though it is not called that anymore and is just referred to as Tor.
It was constructed by the US Naval Research Laboratory, which seems odd but makes sense given it has been used overseas to facilitate so-called "youth revolutions" in the Middle East. Tor received the Free Software Foundation's 2010 Award for Projects of Social Benefit. The award was given with the accompanying statement:
"Using free software, Tor has enabled roughly 36 million people around the world to experience freedom of access and expression on the Internet while keeping them in control of their privacy and anonymity. Its network has proved pivotal in dissident movements in both Iran and more recently Egypt."
The US government is still a big sponsor of Tor via the US State Department, the Broadcasting Board of Governors, and the National Science Foundation are major contributors. It is the US State Department that has produced AYM, a worldwide "revolutionary youth movement" apparently as part of a larger plan to destabilize the Middle East. Tor, then, is apparently an adjunct to that plan.
There are weaknesses with Tor. It cannot protect against monitoring traffic that is coming and going from the network called "end-to-end correlation." Studies have shown it is possible to gain knowledge of a portion of network traffic by analyzing traffic that is entering and exiting.
Various studies indicate that certain attacks at entry and exit points can also reveal significant information that may associate an IP address with a Tor user.