During World War I, both Germany and the US used an early form of napalm in combat flamethrowers, but the substance burned out too quickly to be very effective at igniting targets. Gasoline alone is not an effective burning agent, as it will splash off of the target on impact, and will then flow away from the target like water. What is needed is a thickening agent so that the fuel will stick to it’s intended target for a more complete burning effect. During the early months of World War II, the US Chemical Warfare Service used latex from the Para rubber tree to jell gasoline. This jelled gasoline shot further from flamethrowers, stuck to the target better, and burned longer. But when the US entered the war in the Pacific, natural rubber was in short supply. Research teams at Harvard University, Du Pont and Standard Oil engaged in a Government competition to develop a replacement.
Napalm was developed at Harvard University in 1942-43 by a team of chemists led by chemistry professor Louis F. Fieser, who was best known for his research at Harvard University in organic chemistry which led to the synthesis of the hormone cortisone. Napalm was formulated for use in bombs and flame throwers by mixing a powdered aluminium soap of naphthalene with palmitate (a 16-carbon saturated fatty acid) -- hence napalm [another story suggests that the term napalm derives from a recipe of Naptha and palm oil]. The aluminum soap of naphtenic and palmitic acids turns gasoline into a sticky syrup that carries further from projectors and burns more slowly but at a higher temperature. Naphthenic acids are corrosives found in crude oil; palmitic acids are fatty acids that occur naturally in coconut oil. On their own, naphthalene and palmitate are relatively harmless substances. Napalm itself, is a jelly obtained from the salts of aluminium, palmitic or other fatty acids, and naphthenic acids. Compared to previous incendiary weapons, napalm spread further, stuck to the target, burned longer, and was safer to its dispenser because it was dropped and detonated far below the airplane. It was also cheap to manufacture.
The first use of napalm occurred on July 23, 1944, during pre-invasion air strikes on the island of Tinian, part of the Marianas island chain in the Pacific.
source:
http://www.globalsecurity.org/military/systems/munitions/napalm.htm