According to legend, the first Gauchos were the few settlers who stayed behind when Pedro de Mendoza's first settlement on the site of Buenos Aires was abandoned in 1541. By the time the Spaniards returned to re-establish the city in 1580, the remnants of the first settlement had become wild, primitive loners, who lived in the saddle, slept rough, and were intimately acquainted with the land on which they roamed. The first written, factual reports of gauchos are from the turn of the seventeenth century, only a few years later, so there may be a seed of truth in the legend, however conditions were no less hard in the early days of the second settlement, and it's just as likely that within a few years some of the colonists had taken off to forage from the land rather than chance their survival in Buenos Aires itself. In 1620, there were enough of them that the Buenos Aires authorities were discussing them with concern.
At some point, a code of behavior, akin perhaps to honor among thieves, developed between these vagabond horsemen, and the culture and the character of the gaucho was born. It was during the independence wars though at the turn of the nineteenth century that the gauchos gained a measure of social acceptance and began to play a part in the new Argentine national identity. Shortly after independence had been declared in Buenos Aires, colonies still loyal to the Spanish crown in Peru sent troops to put down what they saw as a treasonous rebellion, and it was only by the ingenious tactic of General Guemes of Salta of persuading local gauchos to form a regiment and fight for him that the loyalists were defeated; the gaucho's knowledge of the local terrain and guerrilla raids enabled them to outwit the better trained and more experienced soldiers.
Following this acceptance, and as large cattle ranches were established in the interior of the country during the first half of the nineteenth century (which again required the gaucho's knowledge of local territory to round up the freely grazing cattle), the gaucho became an invited, romantic figure, both free of the constraints of and useful to society. So admired in fact that when gauchos began to be press-grown into military service, Argentines felt that an injustice was being done, in abusing and corroding an important part of the national character. This sentiment was best expressed in what has become Argentina's national epic poem, The Gaucho Martín Fierro by José Hernández, published in 1872. This work also served to crystallize the romantic image and notion of the gaucho in its modern, recognizable form, that which subsequently became famous through the world.
Integral to this archetypal image of the gaucho is the hard, wild, lone horseman, who works as a seasonal hired hand on cattle ranches, wears chaps, a wide brimmed hat and a poncho, and is armed with a knife and a boleadora (a device consisting of 3 hard leather balls attached to leather cords that are tied at one end, that can be used like a lasso and hurled at running animals to wrap round their neck to get them to stop). The gaucho spurns society's conventions, roasts fresh meat over an open fire, and while hospitable to travelers is quick to rise and defend his pride if he is provoked. A throwback and tribute to primitive man, if you like.
Today, gauchos have experienced something of a revival of fortune since their late ninth and early twentieth century decline, and not just for the benefit of tourism. Through Argentina (and in neighboring Uruguay and Chile) they can be found working on farms, and if anything they more confident today in their culture and identity than in centuries past. Their work is generally well paid (their knowledge of the land along with their horse skills are still valuable assets), although seasonal, so they typically blow their wages between jobs on gambling, drinking and wanton women in the towns before returning to the saddle.
The gaucho tradition is celebrated by a national holiday, the Dia de tradicion , celebrated on José Hernández 'birthday of 10th November. One town, San Antonio de Areco, celebrates with a competition of horsemanship and gaucho skills. In Salta, on Guemes Day in June thousands of gauchos descend on the city from the surrounding countryside to revel through the night before parading through the city in their maroon ponchos.
Aside from The Gaucho Martín Fierro, there are numerous representations and references to gauchos in the arts, a recent example being the film Aballay, a man without fear by Fernando Spiner, which tells the story of a gaucho who kills someone and then sees the rest of his life on the run, and which has been selected to represent Argentina in the competition for the 2012 Best Foreign Film Oscar.