Hypnotherapy invokes a state somewhere between sleeping and waking - the consciousness remains clear but the concious mind is at least partially supressed.

In this state of light trance, clients feel comfortable and relaxed - and their memory, intuition, and concentration increase dramatically.

As long as there has been the human mind - there has been hypnosis.

We use this natural state of mind - unknowingly - constantly. 
This trance is what used to cause you to not hear your mother calling you to dinner, until she raised her voice for the third time, or took other measures!
 Another common example of this is when you are driving down the road, with your mind focused on some other task (a day dream perhaps), and next thing you know, you have passed your next turn.
That is called "highway hypnosis".
The U.S. government defines hypnosis as having two parts: (1) the bypass of the critical factor, and (2) the establishment of acceptable selective thinking.
This "bypass of the critical factor" simply means the release of limiting beliefs.

For example, the use of hypnosis for anaesthesia has been accepted by the American Medical Association since 1958. It is well established to be a fact that hypnosis is useful for creating anaesthesia. However, if you have the limiting belief that the mind cannot create a powerful anaesthesia, you will be unable to do so. However, in hypnosis, this limiting belief can be bypassed, and hypnotic anaesthesia can be quickly created.
"The establishment of acceptable selective thinking," the second part of the definition, refers to the process of guiding someone into hypnosis by using an hypnotic induction. The establishment of selective thinking creates the mental environment or state of mind that enables you to reject limiting beliefs (that you picked up by living in our society), so that you can accept new more empowering ones.

In tandem with other non-hypnotic techniques, such as neuro-linguistic programming and T.F.T., the possibilities for change are almost limitless.