Nanotechnology was informally invented by Richard Feynman in a talk given in 1959. The concept of manipulating individual atoms was, at the time, almost inconceivable, but became prevalent in science-fiction writing and so slowly entered public consciousness.
Professor Norio Taniguchi formally defined it in 1974:
'Nano-technology' mainly consists of the processing of, separation, consolidation, and deformation of materials by one atom or by one molecule.
Today, with electron microscopes and micro-manipulation far advanced, certain actions are possible while others are not. Many commercially available products that advertise nanotechnology are merely existing technology with a buzzword attached. In public discussion, Carbon Nanotubes are often mentioned as a solution for virtually any problem without any understanding of what they are or how to apply them. At the moment, nanotechnology is limited to very slow manipulation of materials. Molecular machines are still in the future.
There is also the danger of Gray Goo, a theory proposed by Eric Drexler; the theory states that a group of self-replicating molecular machines will continue to replicate with the Earth's mass until there is no life left. This theory is largely unproven but popular in science-fiction.
A much greater issue is the damage nanoparticles can cause in human tissue simply by being inhaled. Like asbestos, carbon nanotubes in the lungs could cause mesothelioma.
On the other hand, nanotechnology has been used with great success in the medical field to selectively deliver drugs without danger of overdose. Carbon nanotubes are also being used to develop high-density computer storage systems, and nanoparticles are used extensively in commercial coatings to improve surface smoothness by filling in the spaces too small to detect with the eye.
Aside from the scare reports, which sell papers, nanotechnology as a science is still in its infancy. Its impact on public culture, at the moment, is mostly limited to theorizing and accidental misinformation. Future impact will depend on cost-effective methods and safety issues. Advances in medical science will likely precede other areas, leading to new treatment methods and, hopefully, cures for cancer, AIDS, Alzheimer's and Parkinson's, and any number of other fatal diseases.