Octavian Caesar, later known as Augustus, was given the title of Imperator, (from which the term "Emperor" derives) following his victory over Antony and Cleopatra at the Battle of Actium. The title, which literally means "revered one," was normally given to a Roman General who won a great victory.
Augustus had hoped to restore the Roman Republic, but politically this was impossible. He had seen the results of his uncle Julius Caesar's attempts to rule as dictator and possibly King, and therefore proceeded more cautiously. He did not call himself by any title other than Princeps Civitatus, literally "first citizen." He wore dressed modestly and lived in modest home, rather than the regal setting one might expect. He is perhaps revered as the first Emperor as his reign marked the beginning of the Pax Romana, the Roman Peace in which the Roman domain was free from civil war for the first time in many years. The fact that he had won a major victory and then proceeded to rule Rome during a period of peace for many years justifies his designation as the first true Emperor.
Octavian, who came to be known as Augustus, emerged as the first emperor of Rome through defeating people who had once been his allies and then became his rivals. He was then able to become emperor because of his political skills and his popularity among the people of Rome.
After the death of Julius Caesar, Octavian became part of the Second Triumvirate. The other two members were Marc Antony and Lepidus. They divided the empire among themselves but soon fell to fighting one another to get even more power. Octavian won this war, in part due to his great general Agrippa who was able to win many victories. When Octavian completed his victory, he was able to take complete power.
He was able to take this power because he was very popular. This was partly due to the fact that he had won the war and partly due to his connection to Julius Caesar. In addition, it was due to the fact that he did things like giving free grain to the people.
In these ways, Octavian was able to emerge as Augustus, first emperor of Rome.