Industrial music sprang from the same urban disdain of pop music that led to the foundation of punk in the mid-1970's. It was a strange sister genre of the punk movement: the clubs were the same, the clothes were the same, it was the message that made all the difference. It was more frightening and visceral, less musical; 50% performance art and 50% noise.
Those who consider themselves industrial music historians can't seem to agree on much of anything, but the general consensus will admit that "industrial music" as a term came from the seminal industrial performance art terrorists Throbbing Gristle. Their leader, a British ex-hippie going by the moniker of Genesis P. Orridge, designed an idea of a new musical genre, based not around the African-inspired rock and roll music, but something truly modern, what he considered modern slave music for slaves to factories and industry. So, this music integrated the factory noise of daily life into screeching tributes to urban sprawl, decay, and the pestilence of city life. This was a true soundtrack for Fritz Lang's "Metropolis" and ideals that went beyond insipid love songs and the "make love, not war" anthems of earlier in the decade.
Interviews with P. Orridge are contradictory, but he seems to have come across the name "industrial" during a lunch with friend and artist Monte Cazzaza to whom he was explaining his musical theories. In telling Monte of his "industrial music for industrial people", Monte pointed out that "industrial music" was the title he was searching for.
At the same time, another British band, Cabaret Voltaire, began a similar path with slightly more musical performances and less bizarre theatrics.
Between the two, they managed to make a surprising mark onto the musical consciousness of the underground.
Modern industrial, of course, bears no similarities to the original forms. The evolution is hard to follow, but it is a subtle trail of continued influences and ideals that have made industrial music "industrial".
The next wave of industrial music, by far, had the greatest effect and influence over everything that would come afterward. In North America, Skinny Puppy began releasing its brand of industrial, using strange electronics, harshly distorted vocals, and Burroughs-esque cut-up, train-of-thought lyrics to start making their mark on dancefloors. The opposite was taking place in Europe. Front 242 was pioneering a techno-influenced style of industrial-dance, later to be called EBM, much more appropriate on the dancefloor and nowhere near as harsh as anything previous.
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