'Tequila' is a distilled beverage made from the blue agave - a water-retaining - plant, primarily in the area of the city of Tequila 40 miles (65 km) northwest of Guadalajara, and in the Jaliscan Highlands (Los Altos de Jalisco) of the central western Mexican state of Jalisco.

'Tequila' was first produced in the 16th century; when the Spanish conquistadors in pre-Columbian central Mexico ran out of brandy, they began to distill agave to produce one of North America's first indigenous distilled spirits.

At about 1600, Don Pedro Sánchez de Tagle, the Marquis of Altamira, began mass-producing 'tequila' in the territory of modern-day Jalisco. By 1608, the government began to tax his products.

In 1758, Don José Antonio de Cuervo was issued a land grant by King Ferdinand VI of Spain in the town of Tequila. Here his family founded the Taberna de Cuervo, the farm where they would cultivate and harvest the blue agave plant that is distilled to create 'tequila'.

Don Cenobio Sauza, founder of 'Sauza Tequila' and Municipal president of Tequila from 1884–1885, was the first to export 'tequila' to the United States. His grandson Don Francisco Javier insisted that "there cannot be tequila where there are no agaves!" His efforts led to the practice that real 'tequila' can come only from the State of Jalisco.

The Mexican government declared the term "tequila" its intellectual property in 1974.

More Info: en.m.wikipedia.org