The units of time first developed by humans would likely have been days and months (moons). In some parts of the world the cycle of seasons is apparent enough to lead to people speaking about years and seasons (e.g. 4 summers ago, or 4 floods ago). With the invention of agriculture in the 3rd millennium BC, people relied heavily on the cycle of the seasons for planting and harvesting crops. Most humans came to live in settled societies and the whole community relied upon accurate predictions of the seasonal cycle. This led to the development of calendars. Over time, some people came to recognize patterns of the stars with the seasons. Learning astronomy became an assigned duty for certain people so they could coordinate the lunar and solar calendars by adding days or months to the year.
At about the same time, sundials were developed, likely marked first at noon, sunrise and sunset. In ancient Sumer and Egypt, numbers were soon used to divide the day into 12 hours; the night was similarly divided. In Egypt there is not as much seasonal variation in the length of the day, but those further from the equator would need to make many more modifications in calibrating their sundials to deal with these differences. Ancient traditions did not begin the day at midnight, some starting at dawn instead, others at dusk (both being more obvious).
Since a sundial has only one "hand," a minute probably only meant "a short time." It took centuries for technology to make measurements precise enough for minutes (and later seconds) to become fixed meaningful units—longer still for milliseconds, nanoseconds, and further subdivisions.
When the water clock was invented, time could also be measured at night—though there was significant variation in flow rate and less accuracy and precision. With water clocks, and also candle clocks, modifications were made to have them make sounds on a regular basis.
With the invention of the hourglass (perhaps as early as the 11th century), hours and units of time smaller than an hour could be measured much more reliably than with water clocks and candle clocks.
The earliest reasonably accurate mechanical clocks are the 13th century tower clocks probably developed for (and perhaps by) monks in Northern Italy. Using gears and gradually falling weights, these were adjusted to conform with canonical hours—which varied with the length of the day. As these were used primarily to ring bells for prayer, the clock dial likely only came later. When dials were eventually incorporated into clocks, they were analogous to the dials on sundials, and, like a sundial, the clocks themselves had only one hand.
A possible explanation for the shift from having the first hour being the one after dawn, to having the hour after noon being designated as 1 pm (post meridiem), is that these clocks would likely regularly be reset at local high noon each day. This, of course, results in midnight becoming 12 o'clock.
Peter Henlein, a locksmith and burgher of Nuremberg, Germany, invented a spring-powered clock around 1510. It had only one hand, had no glass cover, and was rather imprecise because it slowed down as the spring unwound. In fact, Henlein went so far as to develop the first portable watch; it was six inches high. People usually carried it by hand, or wore it around their necks or in large pockets. The first reported person to actually wear a watch on the wrist was the French mathematician and philosopher, Blaise Pascal (1623–1662). He attached his pocket watch to his wrist with a piece of string.
In 1577, the minute hand was added by a Swiss clock maker, Jost Burgi (who also is a contender for the invention of logarithms), and was incorporated into a clock Burgi made for astronomer Tycho Brahe, who had a need for more accuracy as he charted the heavens.
Read more about this topic: Time Discipline