The term hacking refers to an attempt to gain unauthorized entry into a computer system, usually one that is accessible remotely. Hacking computers began at almost the exact same time as consumer modems were introduced to the general public. In some cases the hackers would use hacking programs to get through the security of mainframe computers. In other cases computer hacking prodigies simply found loopholes in system.
Hacking flourished in the early days of online communication (i.e. modem to modem computer connections) precisely because it was a new phenomenon. Many military and government systems simply weren't expected or prepared for a hacking attack. When modems became available, a BBS culture developed, and in some cases users would use BBS to exchange hacking programs with each other. Hacking programs were generally pieces of software that cracked passwords or otherwise fooled the machine being hacked into believing the intruder was a legitimate user.
There were, and remain today, different philosophies to hacking computers. In the 1980s, much of the hacking was done by young people, primarily out of interest and curiosity. There was a mandate amongst certain hacking groups that they were not to use their ability to enter systems for malicious reasons. In most cases, those hacking simply viewed gaining entry to tightly secured systems as a challenge, and were interested in learning how the systems worked.
Amongst hackers, hacking the phone system become relatively commonplace in the 1980s, partly because of its relative ease and party because many users needed to make calls to BBSs all over the world, and obviously couldn't afford massive long distance charges.
In some high profile cases, hacking computers took a more serious turn: in the 1980s a hacking group from Milwaukee called '414' had their homes raided by the FBI (some were as young as 16 years old) after they were found to be hacking into major financial and military systems. In some cases hackers had hacked their way into computer systems related to the control of nuclear arsenals, which naturally prompted much fear from the authorities and general public.
In the days before the internet, all remote computer-to-computer communication was conducted with a direct modem connection, and skilled hackers soon found ways to fool these systems into allowing them entry. Because of the advancement in technology this kind of 'hacking to explore' is largely a thing of the past. Most of the hacking that occurs nowadays is likely to be for a malicious purpose, whether it be identity theft or extortion. The days of a 16 year old hacking into US military computer systems for fun are over.
In the 1980s hacking was associated with a certain culture that has mailnly disappeared. Most large organizations have complex security systems and a full time staff of people dedicated to preventing attacks. Hacking today is viewed as malicious and is punished accordingly. One of the member's of the 414 group accused of hacking into the military's guidance systems was ordered to pay a $500 'mischief' fine for his curiosity - it's hard to imagine a similar punishment today.