Whiskey (in Scotland: whisky) is made by distilling grain. Many historians think that the Irish invented whiskey and that they later taught the Scots how to make it.
In the Middle Ages, people used whiskey as a medicine, and maybe this is why it was called "uisce beatha" the Gaelic for "water of life". In those days, monks and farmers made whiskey, but later it was produced in licensed distilleries.
In the 19th century, the Irish whiskey industry had 60% of the world market, but production fell dramatically in the 20th century, and today there are only about 10 distilleries in Ireland. Scotland is now the world's biggest producer, with over 100 distilleries.
Irish whiskey and Scotch taste different, because the distilling process is different in each country.