The word whiskey is an Anglicisation of the ancient Gaelic term "uisce beatha" which translates as "water of life". (The Craythur is a modern Irish term for whiskey, from "the creature", as in "created"...)
At one time, all whisky was spelled without the extra "e", as "whisky". In around 1870, the reputation of Scottish whisky was very poor as Scottish distilleries flooded the market with cheaper spirits produced using the Coffey still. The Irish and American distilleries adopted the spelling "whiskey", with the extra "e", to distinguish their higher quality product. Today, the spelling whisky (plural whiskies) is generally used for whiskies distilled in Scotland, Wales, Canada, Australia, and Japan, while whiskey is used for the spirits distilled in Ireland and the United States.
Although it was similar to Scotch whisky in many ways — principally in that it was distilled primarily from barley — traditional Irish whiskey was distilled from a mash of mixed malted and unmalted grains (referred to as "pure pot-still" whiskey, see below) whereas Scotch is either distilled exclusively from malted grain (hence "single malt") or from unmalted grain (which is generally then mixed with malt whisky to create "blended whisky"). Today, most Irish whiskey is blended from a mixture of pot still whiskey and cheaper grain whiskey. Bushmills, however, is an exception in that it produces no Irish-style pot-still whiskey.
Most Irish whiskey is distilled three times, but so is some Scotch; thus it is a myth, albeit a common one, that this is the main distinction between the two varieties. Irish whiskey also differs in that peat is almost never used in the malting process, so the smoky, earthy overtones common to Scotches (particularly Islay Scotches) are not present. There are notable exceptions to these "rules" in both countries; an example is Connemara Peated Irish Malt (double distilled) whiskey from the independent Cooley Distillery in Co. Louth.
Although Scotland sustains approximately 90 distilleries, Ireland has only three (although each produces a number of different whiskeys): economic difficulties in the last few centuries have led to a great number of mergers and closures. Currently those distilleries operating in Ireland are: New Midleton Distillery (Jamesons, Powers, Paddy, Midleton, Redbreast, and others, plus the independently sold rarity Green Spot), Old Bushmills Distillery (all Old Bushmills, Black Bush, 1608, Bushmills 10-, 12- and 16- and 21-year-old single malts), and Cooley Distillery (Connemara, Knappogue, Michael Collins, Tyrconnell, and others). Only Cooley's is completely Irish-owned. Irish Distillers' Midleton distillery has been part of the Pernod-Ricard conglomerate since 1988. Bushmills was part of the Irish Distillers group from 1972 until 2005 when it was sold to Diageo.
Irish whiskey comes in several forms. There is single malt whiskey made from 100% malted barley distilled in a pot still, and grain whiskey made from grains distilled in a column still. Grain whiskey is much lighter and more neutral in flavour than single malt and is almost never bottled as a single grain. It is instead used to blend with single malt to produce a lighter blended whiskey.
Unique to Irish whiskey is pure pot still whiskey. While single malt whiskey from both Scotland and Ireland is distilled only in a pot still, the designation "pure pot still" as used in Ireland generally refers to whiskey made of 100% barley, mixed malted and unmalted, and distilled in a pot still. The "green" unmalted barley gives the traditional pure pot still whiskey a spicy, uniquely Irish quality. Like single malt, pure pot still is sold as such or blended with grain whiskey. Usually no real distinction is made between whether a blended whiskey was made from single malt or pure pot still. Only Redbreast, Green Spot (which is sold only through Mitchell and Son vintners in Dublin), and some premium Jameson brands are pure pot still whiskies. All of these are distilled at Midleton.
Irish whiskey is believed to be one of the earliest distilled beverages in Europe, dating to the mid-12th century (see Distilled beverage). The Old Bushmills Distillery lays claim to being the oldest licenced distillery in the world since gaining a licence from James I in 1608.