Milk chocolate, the most common eating chocolate, actually arrived on the scene fairly late in the history of chocolate.
Milk chocolate's development was made possible with the invention of powdered milk by Swiss chemist Henri Nestlé in 1867. Previous attempts at mixing whole (liquid) milk and chocolate liquor didn't turn out well. But in 1879, a Swiss chocolate manufacturer and neighbor of Nestlé by the name of Daniel Peter decided to try combining the newly invented powdered milk with chocolate liquor -- and true milk chocolate was born.
Milk chocolate is made by combining chocolate liquor, cocoa butter, sugar, flavorings, and sweetened condensed or powdered whole milk (which one is used depends on the individual manufacturer's formula and production methods). The sugar and milk are first blended together, then they're mixed with chocolate liquor and flavorings and dried to create a substance called "milk chocolate crumb." Next, additional cocoa butter is blended with the crumb, and the mixture is sent through the standard conching and refining processes.
All milk chocolate made in the United States must contain at least 10 percent chocolate liquor and at least 12 percent milk solids. Bars of fine milk chocolate typically have a cacao content of between 30 percent and 45 percent, while less-expensive products may have considerably less. Milk chocolate has a sweeter and far more mellow chocolate flavor than dark chocolate, and since a higher cacao content gives a chocolate bar more "snap," milk chocolate tends to be less crisp than dark chocolate.