Updated on 28 April, 2012 and reproduced on realson.co.uk

Sir Arthur Conan Doyle was not Sherlock Holmes’ biggest fan. He was somewhat astonished that his silly, poorly fleshed-out creation would have so much a hold over his readership. Unfortunately for him, the creation was able to outwit the creator. Not only did Mr Holmes refuse to die after being hurled off a cliff by the greatest criminal mastermind of the nineteenth century, but his most well known accoutrements and affectations were far more the product of collective imagination than the authorial brain.

In the public mind, Holmes is never without his deerstalker and Inverness cape, symbolising him as a man of both deliberation and action, yet these were both the work of an illustrator Sidney Paget. The text never refers to more than an ear-flapped travelling hat, and even then, it does so in a work published a year after the first illustration.1

So too with Holmes’ most famous utterance. "Elementary my dear Watson" never occurs in any of the original stories. Holmes certainly has a fondness for the word "elementary" and he is in the habit of addressing his faithful companion as "my dear Watson" but no-where in the canon are these combined.

Instead, it seems that it was most probably first spoken by William Gillette, one of the first actors to play the great detective on stage. Supposedly, many of the Holmesian archetypes can be traced to his portrayal. The idea that the phrase first appeared in theatre was played with in-universe by the BBC’s audio adaptation of the Lion’s Mane. In it, Holmes reads a theatre adaptation of Watson’s work – including the famous phrase – and remarks that he thinks it is "rather good. " Watson, however, is less impressed. Complaining it makes him sound like an idiot.2

Here though, I think, is the fascination with the phrase. Conan Doyle may not have written it but it undoubtedly sounds like something that Holmes might say. Clever, patronising, arrogant, but with a sort of cold affection for Watson, the phrase sums up the classic detective – assistant relationship.

References

1The first illustration appears in the Boscombe Valley Murder (1891) , the reference to the hat is in Silver Blaze (1892).
2The Casebook of Sherlock Holmes, BBC Audiobooks Ltd (1 April 1996)

Other Sources

Snopes.com
Wikipedia