HTML5 was created through a joint effort between the W3C and WHATWG to enhance HTML and introduce new features like forms, multimedia, APIs, and structure. It aims to provide more flexibility and interoperability while degrading gracefully in browsers that don't support it. Key additions include new structural elements, block and inline semantic elements, embedded media support, and interactivity elements. HTML5 is still evolving but will improve web development by standardizing element handling.