The term "cake" has a long history. The word itself is of Viking origin, from the Old Norse word "kaka." Although clear examples of the difference between cake and bread are easy to find, the precise classification has always been elusive.
The most primitive peoples in the world began making cakes shortly after they discovered flour. In medieval England, the cakes that were described in writings were not cakes in the conventional sense. They were described as flour-based sweet foods as opposed to the description of breads, which were just flour-based foods without sweetening.
Bread and cake were somewhat interchangeable words with the term "cake" being used for smaller breads. The earliest examples were found among the remains of Neolithic villages where archaeologists discovered simple cakes made from crushed grains, moistened, compacted and probably cooked on a hot stone. Today's version of this early cake would be oatcakes, though now we think of them more as a biscuit or cookie.
Cakes were called "plakous" by the Greeks, from the word for "flat." These cakes were usually combinations of nuts and honey. They also had a cake called "satura," which was a flat heavy cake.
In ancient Rome, basic bread dough was sometimes enriched with butter, eggs, and honey, which produced a sweet and cake-like baked good. The Latin poet Ovid in his first book of exile, Tristia, mentions a birthday celebration for him and his brother. One of the main things he mentioned was cake.
Early cakes in England were also essentially bread: the most obvious differences between a "cake" and "bread" were the round, flat shape of the cakes, and the cooking method, which turned cakes over once while cooking, while bread was left upright throughout the baking process.
Cakes were usually baked for special occasions because they were made with the finest and most expensive ingredients available to the cook. The wealthier you were, the more likely you might consume cake on a more frequent basis.
By the early 19th century, due to the Industrial Revolution, baking ingredients became more affordable and readily available because of mass production and the railroads. Modern leavening agents, such as baking soda and baking powder were invented. That is really what brings us to today. Cake is an extremely old entity but we are constantly trying to invent new ways to make it fun and exciting.
Sources: Whats Cooking America, Wikipedia, and our own genius minds