The history of animation is a massive subject – and traceable back to at least the 1st century where several devices were able to convey the idea of motion using animated pictures. A brief but solid introduction to these precursors to film animation can be found here http://en.wikipedia.org/wiki/History_of_animation
I just want to show you a couple of traditional (as we now call it) early animations. Fantasmagorie (1908, dir Emile Cohl). Was the first film created using was by drawing each frame on paper and then shooting each frame. It was shot onto negative paper, which gave the picture a blackboard look. There were also sections of live action where the animator’s hands would enter the scene.
The second animation Gertie the Dinosaur (1914, dir Windsor McCay) is a very early example of character development in drawn animation. The film was made for McCay's theatre act and as it played McCay would speak to Gertie who would respond with a series of gestures. There was a scene at the end of the film where McCay walked behind the projection screen and a view of him appears on the screen showing him getting on the cartoon dinosaur's back and riding out of frame. This scene made Gertie the Dinosaur the first film to combine live action footage with hand drawn animation. McCay hand-drew almost every one of the 10,000 drawings he used for the film.