If you read the entire Shakespeare canon, you become aware that Shakespeare was obsessed with female infidelity. This is dealt with not only in the plays, but also in the sonnets: "When my love swears that she is made of truth/I do believe her, though I know she lies" (Sonnet 138). The image of the "horns" of the cuckold appears over and over again in his work.

Where this obsession came from, we can never really know, although scholars continue to speculate. Perhaps the "Dark Lady" of the sonnets was flagrantly unfaithful? In any case, in Othello, Shakespeare examines how jealousy and suspicion can poison a true love and the consequences of allowing an unfounded obsession to dominate action. Desdemona is a true innocent, and she suffers and dies because of Othello's fears, incited by the sublimely evil Iago.

Shakespeare clearly also wanted to continue to explore the concept of a simply evil man, something he had already dealt with to some degree in Richard III. However, in that play, he can't resist giving the gleefully villainous Richard some motivation (and one famous scene) so that the audience understands, to a degree, the reasons he is the way he is. Iago, on the other hand, spouts only very specious and flimsy reasons for his hatred of Othello. He was passed over for promotion. He "suspects" his wife of infidelity with the Moor, which is completely unbelievable. Ultimately, however, he's just bad and sadistically enjoys seeing the effects of his manipulations.

Then, although the "tragic flaw" theory is not in fashion at the moment, we can't help but see that the story becomes tragic, rather than melodrama, because Othello, a great man, is brought down by the crack in his armor, skillfully targeted by Iago.

Did Shakespeare also intend Othello to explore the concept of racism, in this case also internalized by Othello and causing his initial doubt to metastasize? The Elizabethans were not us, and we export our own views to their world at our peril—but, I believe, that as in The Merchant of Venice, the fact that we see these plays through a different prism merely illustrates why Shakespeare, as Ben Jonson wrote, "was not of an age, but for all time."

Since Shakespeare left behind no personal accounts of his life—no letters, no journals, no essays—we have to use educated guesses as to why he wrote any of his plays. Scholars such as David Bevington believe Shakespeare wrote it near the time of its performance in 1604, when Shakespeare's players performed it at the court of James I. Apparently, if this timing is correct, Shakespeare wanted or needed a new play to perform for the king. He may have come across the story idea in an Italian drama called Cinthio by Giraldi, written in 1565 and translated into French in 1584, which features characters with the same names. The warfare between the Europeans, who were Christian, and the Muslim Ottoman Empire was on people's minds in the sixteenth and early seventeenth centuries, and a play starring a Moor and set in Venice might have seemed enticingly exotic enough for Shakespeare. Shakespeare himself would have been turning 40 in 1604, and it is likely that he too had concerns with entering middle age (and 40 would have felt older then than now) similar to those plaguing Othello, who fears he is too old to hold the affections of his much younger wife.

As always, Shakespeare was a great chronicler of the times. Venice was an important trading post and link between Europe and the East. At the time the play was written, there would have been ambassadors from Venice and beyond visiting Elizabethan England. Shakespeare would have enjoyed studying these 'exotic' strangers. Othello himself is referred to by Shakespeare as 'an extravagent, wheeling stranger' and this comment may have been coloured by Shakespeare's observations. The other answer of course is that, ever the magpie, Shakespeare 'borrowed' the tale by Cinthio called Hecatommithi, but adapted it coloured it according to his own fancy.

Some scholars believe Shakespeare based Othello on a short story called Gli Hecatommithi, which was published in 1565 by Geraldi Cinthio. The story dealt with the unfaithfulness of husbands and wives. Shakespeare might have found this theme excellent material for a stage play.

Shakespeare was probably also aware of accounts of wars between Turkey and Venice in the fifteenth and sixteenth centuries (Othello is general of the Venitian armed forces).

The plot allowed Shakespeare to explore issues of jealousy and deceit in the context which it can be most powerful -- that of a husband and wife.

Why did William Shakespeare write Othello?

Playwrights love stories in which there are a number of contrasting characters because it makes it easy for the audience to get to know them and to understand their various parts in the continuity. Othello is an excellent example of what Lajos Egri in his authoritative book The Art of Dramatic Writing calls "orchestration," using the analogy of musical composition, and especially of opera. The two leading characters, Othello and Desdemona, could hardly be more strongly contrasting. One is a man, the other a woman. One is black, the other is white. One is a fierce warrior, the other sweet and gentle. Giuseppi Verdi saw the operatic potential in Shakespeare's play and adapted it into a famous opera. Verdi could see Othello as a baritone and Desdemona as a coloratura soprano and imagine their love duet when Othello begins with:

Put out the light, and then put out the light.
If I quench thee, thou flaming minister,
I can again thy former light restore,
Should i repent me; but once put out thy light,
Thou cunning'st pattern of excelling nature,
I know not where is that Promethean heat
That can thy light relume. When I have plucked the rose
I cannot give it vital growth again;
It needs must wither.

Shakespeare has even provided Desdemona with a little song:

"The poor soul sat sighing by a sycamore tree,
    Sing all a green willow;
Her hand on her bosom, her head on her knee,
    Sing willow, willow, willow."

There are good parts for the other actors as well. There are three female characters, Desdemona, Emilia, and Bianca, all very different kinds of women. Iago is one of Shakespeare's best creations, and he presents a strong contrast to the Moor. There are also good roles for Cassio and Roderigo. Shakespeare had a whole company of actors and must have always been on the lookout for stories that could utilize all of them, including the young men who played the female roles.

In addition to the well orchestrated cast, Shakespeare must have liked the settings. Very likely his company already owned many of the costumes they would need for the production. Costuming was of great importance in creating the illusion of time and place, since there was little else in the way of furniture, backdrops, props, etc., available to create the sense of time and place. Shakespeare's audience probably enjoyed the illusion of being transported to faraway places, as they were in Romeo and Juliet, As You Like It, Measure for Measure, The Tempest, Julius Caesar, and many others. Drama has always been escapism--offering escape from one's own problems through identifying with the problems of others. Othello is both a tragedy and a love story, and Shakespeare's audiences must have favored tragedies and love stories. No doubt Shakespeare was attracted to the story of a man who kills the woman he loves. It makes for wonderful drama and poetic dialogue.

And Shakespeare must have enjoyed writing the dialogue for Iago, whom Othello calls "Precious villain!" Iago is probably Shakespeare's best villain and one of his best creations. He is wicked, cunning, cynical, resourceful, daring, witty, opportunistic, fearless, adaptable, and articulate. A really precious villain.

Why did Shakespeare put Othello in a position of power in the play Othello?

I agree that Shakespeare establishes Othello's power and military prowess for the reasons mentioned in the previous posts.  As epollock notes, Aristotle dictated that a tragic hero must be one who is "better" than the average person, since this sort of character trait will evoke catharsis in readers (who will pity Othello and also be afraid that if someone as noble as he is able to have such a tragic fall, then anyone is susceptible to such tragedy).  The respect that all the characters (even Brabantio, before Othello married Desdemona) have for Othello make it even more shocking that he is capable of the behavior he exhibits in the second half of the play.  Further, as amy-lepore notes, the race issue cannot be overlooked here; Othello, DESPITE being an outsider in Venice, was able to achieve such a high-ranking position.  However, as Iago so clearly brings to light, other characters, when pressed, cannot overlook Othello's race.

Why did Shakespeare put Othello in a position of power in the play Othello?

It may very well have been to bring to light the racism of the time.  Shakespeare has been known (as are other authors--Chaucer, Alexander Pope, Jonathan Swift, Charles Dickens, Oscar Wilde, Edith Wharton, to name a few) to put it all out there and place the mirror before society's face and make them look full-on into their own faults.  He often addressed the way women were treated in his time period--why do you think so many of them dressed up like men and went out into the world to do the things they did?  Because they couldn't do them as women!  Sometimes it works, sometimes it doesn't.