From the Greek xeros (dry) and graphia (writing).

The process was invented in 1938 by Chester F. Carlson, working in a room over a bar in Astoria, Queens, NY. Carlson tried for six years to interest someone in his idea, but it was rejected by over twenty companies before he finally entered into a royalty sharing arrangement with the Battelle Memorial Institute in 1944. 1n 1947, the Haloid Corporation picked up the commercial rights to Carlson's process. Over the next ten years, Haloid produced a series of filthy Rube Goldberg contraptions, but in 1959, they produced the first viable dry ink office copier. All the years of trouble were worth it. The old Haloid Corporation is now known as Xerox.

The process itself works like this:

First, a uniform electrostatic charge is placed on the surface of a photoconductor in darkness. A photoconductor is a material whose electrical resistance is reduced in the presence of light, so when an image is projected onto it, the charge drains away to ground in the exposed areas, but is retained in the dark places. This latent image is passed by the toner, which is a plastic resin with its own, opposite electrostatic property. The toner particles are attracted to the appropriate areas of the photoconductor like bits of tissue paper to a comb. Next, a sheet of paper is placed on the developed image, and another charge is applied, attracting the toner particles away from the photoconductor and onto the paper. This is called transfer. The photoconductor is is discharged and cleaned for the next cycle while the paper is transported to a mechanism that fuses the image onto it with heat and pressure.

The lenses and mirrors of traditional photocopiers have all but disappeared, replaced by scanners, CCDs, lasers, and/or LEDs, but Carlson's concept is still the standard technology in use for short run printing. In fact, as the commercial uses for "instant" publishing grow, and the sophistication of electrophotographic equipment (such as laser printers) improves, xerography will continue to supplant other techniques for putting images on paper.

I have come across some information indicating that both the concept and the term xerography were originated by Rasmus Malling Hansen, a Dane, way back in 1872. So far, I've been unable to unearth anything in English to support this claim. Perhaps some Danish noder out there would rise to the defense of his/her countryman...
Update to the Update:
The inimitable liveforever has been kind enough to shed light on Malling Hansen's foray into xerography. From the sound of it, Chester F. Carlson still deserves credit for the invention of xerography as we know it, but why have we never heard of that Danish guy?

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