A rheostat is a variable resistor that is used to alter the amount of voltage or current in a circuit, according to HowStuffWorks. Rheostats make possible functions of electronics such as light dimmers and volume dials.
The most simple rheostat is made of a coil or rode of wire. A slider is placed on the wire which will then create more or less resistance in the circuit. When the slider moves, it either increases the distance the current must travel to complete the circuit, or it decreases it. When the distance is increased, there is more resistance, which means that there is less current flowing through the circuit. When the distance decreases, there is less resistance, which means there is more current flowing through the circuit.
Rheostats are a type of potentiometer, a broader type of electrical resistor. Wikipedia explains that rheostats are manufactured by many companies, but due to their simplicity, can be made by people on their own, and are often made in science classes in order to learn about electrical resistance. Credit for the development of the rheostat is often given to Charles Wheatstone, a 19th century British inventor. The basic designs that were developed in Wheatstone's times are still in use today.