Back when the Island started in 2008, there was no Banter. It was back in this primordial soup of a game that the slang "to wall", meaning "to leave the Island for a brief period"1), was formed. It came from "breaking the 4th wall" by abruptly having to end or pause a scene without writing oneself out in some way. There may have been Distractions2) at this time3), and possibly The Place Behind the Fourth Wall. This place, also known as Location 4 (officially), Loc4, or L4, was just a regular room, but with text at the top indicating that the text in the room was OOC. Much like the Common Ground, it was available from every Outpost.
In 2009, CMJ added Natter to the island.
The first dual channel commentary came to the Island in June 2010. The first banter spaces were confined to each individual outpost. The Island then voted on their feelings about the existence of Banter, and whether it should be Global or Local. This eventually led to the creation of 'Radio Banter' which resembles the current day Global Banter, but it was in a separate pop-out window.4).
In September 2012, CMJ decided to merge all the Banters channel into one.
In the process, Radio Banter was removed 5)6). Radio Banter will return in Season 3.
For a brief period, Banter looked like '[character name]'s player says, "Whatever"'. Then it returned to normal. This foreshadowed a change that was about to occur, The Great Cleavening7).
In order to... something or other, Banter was split into Player Chat and Character Chat. Player Chat had the aforementioned "'s player" suffix activated, and emoting8) was disabled.
A couple months after the split, a level requirement was added to Character Chat; players had to have reached level 6 at least once in order to use it. There was a good deal of discussion about whether or not this was a good idea.9)
Years later,10) Loc4 was removed, silently, due to a lack of usage. Near the end, contestants were using it as a place to track what Down Below was like, and other such things. CMJ said the removal was because Player Banter served the original purpose of Loc4: to be a global ooc space where new players could get advice.