1. Gameplay
205.4c Any permanent with the supertype "legendary" is subject to the state-based effect for legendary permanents, also called the "legend rule" (see rule 420.5e).
420.5e If two or more legendary permanents with the same name are in play, all are put into their owners' graveyards. This is called the "legend rule." If only one of those permanents is legendary, this rule doesn't apply.
601.12. The "legend rule" (see rule 420.5e) applies to a permanent only if other legendary permanents with the same name are within its controller's range of influence.
Magic: The Gathering Comprehensive Rules, as of May 1, 2008
Only one copy of a given legendary card may be in play at the same time. If multiple copies of a legend are put into play, all of them are put into the graveyard (discard pile). (This has not always been the case; see History below.)
The cards must have exactly the same name in order to trigger the legend rule. Some characters are represented on multiple cards: for example, the character Kamahl appears as both Kamahl, Pit Fighter and Kamahl, Fist of Krosa, and the character Akroma appears as both Akroma, Angel of Wrath and Akroma, Angel of Fury. Because the cards are different, one of each card can be in play without counting as the same legend, even though they represent the same character.
Most legendary cards are creatures; legendary artifacts, lands and enchantments also exist.
2. History
Legendary creatures and lands were introduced in 1994 with Legends, the game's third expansion set. Although some cards printed prior to Legends represent unique individuals and would logically have been legendary, they were and are still treated as non-legendary. The first legendary artifact, Sword of the Chosen, was printed in the Stronghold set in 1998, and the first legendary enchantments were printed in Champions of Kamigawa in 2004.
The way the legend rule functioned when it was first introduced differed from its present form: if a legendary card came into play when another copy of the same card was already in play, the recently played legend would be put in the graveyard, but not the one that was already in play. This could be a significant advantage to the player who played the legend first, and was particularly an issue with legends that could be played cheaply and quickly, such as Lin Sivvi, Defiant Hero.