Gygax, Perren, and Arneson and many others were originally involved with the "Chainmail: Rules for Medieval Miniatures" wargame at first. Chainmail had a dice roll system for determining combat probabilities, sort of the like the game "Risk" but on a more detailed level. They used it to simulate historical battles, and then when that got boring, they started making up new scenarios. Then they added the "Fantasy Supplement" to bring in magic and mythical monsters, and that got a lot of people excited. You can still find some of these old documents online in the archives.

Gygax and crew then started the new concept of a roleplaying adventure game which used the combat & magic mechanics extracted from Chainmail. They added the player character, dungeon master, and story concepts, etc., and D&D was born.

So in a way, you could consider that BG III has really been in development for 1400 years. I know it sure seems that way for me right now, geez when is this game gonna be released in full?