Postmodernism literally means 'after the modernist movement'. While "modern" itself refers to something "related to the present", the movement of modernism and the following reaction of postmodernism are defined by a set of perspectives. It is used in critical theory to refer to a point of departure for works of literature, drama, architecture, cinema and design, as well as in marketing and business and the interpretation of history, law and culture in the late 20th century.
Postmodernism is an aesthetic, literary, political or social philosophy, which was the basis of the attempt to describe a condition, or a state of being, or something concerned with changes to institutions and conditions (as in Giddens, 1990) as postmodernity. In other words, postmodernism is the "cultural and intellectual phenomenon", especially since the 1920s' new movements in the arts, while postmodernity focuses on social and political outworkings and innovations globally, especially since the 1960s in the West.
The term postmodern is described by Merriam-Webster as meaning either "of, relating to, or being an era after a modern one" or "of, relating to, or being any of various movements in reaction to modernism that are typically characterized by a return to traditional materials and forms (as in architecture) or by ironic self-reference and absurdity (as in literature)", or finally "of, relating to, or being a theory that involves a radical reappraisal of modern assumptions about culture, identity, history, or language".
The American Heritage Dictionary describes the meaning of the same term as "Of or relating to art, architecture, or literature that reacts against earlier modernist principles, as by reintroducing traditional or classical elements of style or by carrying modernist styles or practices to extremes: “It [a roadhouse] is so architecturally interesting … with its postmodern wooden booths and sculptural clock”.
Reaction to modernism
Postmodernism was originally a reaction to modernism. Largely influenced by the Western European "disillusionment" induced by World War II, postmodernism tends to refer to a cultural, intellectual, or artistic state lacking a clear central hierarchy or organizing principle and embodying extreme complexity, contradiction, ambiguity, diversity, interconnectedness or interreferentiality, in a way that is often indistinguishable from a parody of itself. It has given rise to charges of fraudulence.
Postmodernity is a derivative referring to non-art aspects of history that were influenced by the new movement, namely developments in society, economy and culture since the 1960s. When the idea of a reaction or rejection of modernism was borrowed by other fields, it became synonymous in some contexts with postmodernity. The term is closely linked with poststructuralism (cf. Michel Foucault) and with modernism, in terms of a rejection of its bourgeois, elitist culture.
History of the term
The term was first used around the 1870s in various areas. For example, John Watkins Chapman avowed "a postmodern style of painting" to get beyond French Impressionism Then, J.M.Thompson, in his 1914 article in The Hibbert Journal (a quarterly philosophical review), used it to describe changes in attitudes and beliefs in the critique of religion: "The raison d'etre of Post-Modernism is to escape from the double-mindedness of Modernism by being thorough in its criticism by extending it to religion as well as theology, to Catholic feeling as well as to Catholic tradition" ('Post-Modernism, J.M.Thompson, The Hibbert Journal Vol XII No.4 July 1914 p.733).
In 1917 Rudolf Pannwitz used the term to describe a philosophically oriented culture. Pannwitz's idea of post-modernism came from Nietzsche's analysis of modernity and its ends of decadence and nihilism. Overcoming the modern human would be the post-human. But, contrary to Nietzsche, Pannwitz also includes nationalist and mythical elements. 
It was used later in 1926 by B.I.Bell in his "Postmodernism & other Ess." In 1925 and 1921 it had been used to describe new forms of art and music. In 1942 H. R. Hays used it for a new literary form but as a general theory of an historical movement it was first used in 1939 by the historian Arnold J. Toynbee: "Our own Post-Modern Age has been inaugurated by the general war of 1914-1918." 
In 1949 it was used to describe a dissatisfaction with modern architecture, leading to the postmodern architecture movement. Postmodernism in architecture is marked by the re-emergence of surface ornament, reference to surrounding buildings in urban architecture, historical reference in decorative forms, and non-orthogonal angles. It may be a response to the modernist architectural movement known as the International Style.
The term was applied to a whole host of movements, many in art, music, and literature, that reacted against modernism, and are typically marked by revival of traditional elements and techniques. Walter Truett Anderson identifies postmodernism as one of four world views. These four worldviews are the postmodern-ironist, which sees truth as socially constructed, the scientific-rational in which truth is found through methodical, disciplined inquiry, the social-traditional in which truth is found in the heritage of American and Western civilisation and the neo-romantic in which truth is found either through attaining harmony with nature and/or spiritual exploration of the inner self.
Influence and distinction from postmodernity
Postmodernist ideas in philosophy and the analysis of culture and society expanded the importance of critical theory and has been the point of departure for works of literature, architecture, and design, as well as being visible in marketing/business and the interpretation of history, law and culture, starting in the late 20th century. These developments — re-evaluation of the entire Western value system (love, marriage, popular culture, shift from industrial to service economy) that took place since 1950's and 1960's, with a peak in the Social Revolution of 1968 — are described with the term postmodernity, as opposed to postmodernism, a term referring to an opinion or movement. Whereas something being "postmodernist" would make it part of the movement, its being "postmodern" would place it in the period of time since the 1950s, making it a part of contemporary history.
Notwithstanding the foregoing distinctions, both terms can be synonymous and interchangeable in common parlance, given the fluidity and ongoing evolution of their definitions.
The usage and extent of the concept of ‘postmodernism’
Whether ‘postmodernism’ is seen as a critical concept or merely a buzzword, one cannot deny its range. Dick Hebdige, in his ‘Hiding in the Light’ illustrates this:
When it becomes possible for a people to describe as ‘postmodern’ the décor of a room, the design of a building, the diegesis of a film, the construction of a record, or a ‘scratch’ video, a television commercial, or an arts documentary, or the ‘intertextual’ relations between them, the layout of a page in a fashion magazine or critical journal, an anti-teleological tendency within epistemology, the attack on the ‘metaphysics of presence’ a general attenuation of feeling, the collective chagrin and morbid projections of a post-War generation of baby boomers confronting disillusioned middle-age, the ‘predicament of reflexitivity, a group of rhetorical tropes, a proliferation of surfaces, a new phase in commodity fetishism, a fascination for images, codes and styles, a process of cultural, political or existential fragmentation and/or crisis, the ‘de-centring’ of the subject, an ‘incredulity towards metanarratives’, the replacement of unitary power axes by a plurality of power/discourse formations, the ‘implosion of meaning’, the collapse of cultural hierarchies, the dread engendered by the threat of nuclear self-destruction, the decline of the university, the functioning and effects of the new miniaturised technologies, broad societal and economic shifts into a ‘media’, ‘consumer’ or ‘multinational’ phase, a sense (depending on who you read) of ‘placelessness’ or the abandonment of ‘placelessness’ (critical regionalism) or (even) a generalised substitution of spatial for temporal coordinates: when it becomes possible to describe all these things as ‘postmodern’ (or more simply using a current abbreviation as ‘post’ or ‘very post’) then it’s clear we are in the presence of a buzzword.
Development of postmodernism
The movement of Postmodernism began with architecture, as a reactionary movement against the perceived blandness and hostility present in the Modern movement. Modern Architecture as established and developed by masters such as Walter Gropius and Philip Johnson was focused on the pursuit of an ideal perfection, harmony of form and function and dismissal of frivolous ornament. Critics of modernism argued that the attributes of perfection and minimalism themselves were subjective, and pointed out anachronisms in modern thought and questioned the benefits of its philosophy. Definitive postmodern architecture such as the work of Michael Graves rejects the notion of a 'pure' form or 'perfect' architectonic detail, instead conspicuously drawing from all methods, materials, forms and colors available to architects. Postmodern architecture began the reaction against the almost totalitarian qualities of Modernist thought, favoring personal preferences and variety over objective, ultimate truths or principles. It is this atmosphere of criticism, skepticism and subjectivity that defines the postmodern philosophy.
Notable philosophical and literary contributors
Søren Kierkegaard, Friedrich Nietzsche and other late 19th and early 20th century authors laid the groundwork for the existential movement of the 20th century; they did so through arguments against objectivity and an emphasis on skepticism, especially concerning social morals and societal norms. Other notable precursors of postmodernism include Laurence Sterne's novel Tristram Shandy, Alfred Jarry's 'Pataphysics, and the work of Lewis Carroll.
Art and literature of the early part of the 20th century play a significant part in shaping the character of postmodern culture. Dadaism attacked notions of high art in an attempt to break down the distinctions between high and low culture; Surrealism further developed concepts of Dadaism to celebrate the flow of the subconscious with influential techniques such as automatism and nonsensical juxtapositions (evidence of Surrealism's influence on postmodern thought can be seen in Foucault's and Derrida's references to Rene Magritte's experiments with signification).
Some other significant contributions to postmodern culture from literary figures include the following: Jorge Luis Borges experimented in metafiction and magical realism; William S. Burroughs wrote the prototypical postmodern novel Naked Lunch and developed the cut up method (similar to Tristan Tzara's "How to Make a Dadaist Poem") to create other novels such as Nova Express; Samuel Beckett attempted to escape the shadow of James Joyce by focusing on the failure of language and humanity's inability to overcome its condition, themes later to be explored in such works as Waiting for Godot. Writers such as Jean-Paul Sartre and Albert Camus drew heavily from Kierkegaard and Nietzsche, and other previous thinkers, and brought about a new sense of subjectivity, and forlornness, which greatly influenced contemporary thinkers, writers, and artists. Karl Barth's fideist approach to theology and lifestyle, brought an irreverence for reason, and the rise of subjectivity.
Postcolonialism after World War II contributed to the idea that one cannot have an objectively superior lifestyle or belief. This idea was taken further by the anti-foundationalist philosophers: Heidegger, then Ludwig Wittgenstein, then Derrida, who examined the fundamentals of knowledge; they argued that rationality was neither as sure nor as clear as modernists or rationalists assert. Both World Wars contributed to postmodernism; it is with the end of the Second World War that recognizably postmodernist attitudes begin to emerge.
It is possible to identify the burgeoning anti-establishment movements of the 1960s as the constituting event of postmodernism. The theory gained some of its strongest ground early on in French academia. In 1971, the Arab-American Theorist Ihab Hassan was one of the first to use the term in its present form (though it had been used by many others before him, Charles Olson for example, to refer to other literary trends) in his book: The Dismemberment of Orpheus: Toward a Postmodern Literature; in it, Hassan traces the development of what he called "literature of silence" through Marquis de Sade, Franz Kafka, Ernest Hemingway, Beckett, and many others, including developments such as the Theatre of the Absurd and the nouveau roman. In 1979 Jean-François Lyotard wrote a short but influential work The Postmodern Condition: A report on knowledge. Richard Rorty wrote Philosophy and the Mirror of Nature (1979). Jean Baudrillard, Michel Foucault, and Roland Barthes are also influential in 1970s postmodern theory. Authors such as Graham Swift adopted postmodern techniques in their literary work to create an ambiguous style of writing.
The postmodern impulse in classical music arose in the 1970s with the advent of musical minimalism. Composers such as Terry Riley, John Adams, Steve Reich, Phillip Glass, and Lou Harrison reacted to the perceived elitism and dissonant sound of atonal academic modernism by producing music with simple textures and relatively consonant harmonies. Some composers have been openly influenced by popular music and world ethnic musical traditions. Though representing a general return to certain notions of music-making that are often considered to be classical or romantic, not all postmodern composers have eschewed the experimentalist or academic tenets of modernism. The works of Dutch composer Louis Andriessen, for example, exhibit experimentalist preoccupation that is decidedly anti-romantic. Eclecticism and freedom of expression, in reaction to the rigidity and aesthetic limitations of modernism, are the hallmarks of the postmodern influence in musical composition.