The rgfa "Threefold Model" is a concept which arose in discussion on the forum rec.games.frp.advocacy around May to August of 1997. The name was coined by Mary Kuhner, in a July 1997 post which outlined the principles. In October 1998, I wrote a "Frequently Asked Questions" (FAQ) document about it. It has since then been circulated in a variety of places. It was also the inspiration for a related model known as "GNS", which has been articulated by Ron Edwards on his site, The Forge. However, GNS is radically different in many aspects compared to the original Threefold Model.
The model arose as an attempted compromise to heated debates over the proper style of role-playing. Earlier conceptual models of RPGs tended to separate into a single axis: between storytelling and role-playing on the one hand, and wargaming on the other. The Threefold tries to express three fully valid and functional goals or paradigms of play, which may at times conflict. These were termed "Drama" (or Story), "Simulation" (or World), and "Game" (or Challenge).