Folk Dance has a long history in many parts of the world. Sometimes it is primarily for “display” to an audience (EG: Morris Dancing) but there are many “social” forms where the emphasis is on everyone participating. In England, the social form has long been known as “Country Dancing”. This was often taught to school children and this "common knowledge" meant that was feasible for it to feature at weddings, fundraising events, etc. To some extent it has survived the globalisation represented by rock/disco.
Another strand is “Folk Festivals” that got going after WWII usually offered an event billed as a “ceilidh” that had country dancing as well as breaks ("spots") for a display dance or a few songs. This meant that a small subsection of the UK population danced fairly often and became proficient.
Another change happened in the 1970s that Dave Ingledew suggests may have been led by musicians influenced by playing for Morris Dancing. The music slowed, had more rhythmic drive and phrasing. Instead of a scamper around dance moves, the actual dancing became important with emphasis on stepping style.
Yet another strand (that is very difficult to date) was the involvement of people who think of themselves as dancers rather than “folkies”. This group dances as a hobby and may also partake of other dances that may or may not be “folk”.
The term "ECeilidh" probably dates from around 1997 when a related Internet discussion group was formed. The first part of the email address used to post messages is "eceilidh", a contraction of "English Ceilidh" and also a reflection of the then fashion for referring to Internet-related things as "email", "ecommerce", etc.
The end result (as of 2017) is a somewhat diverse landscape:
Some of the dances and tunes are old and traditional but others are more recent
Some of the dances are “English” but there are many imports
Most dances involve couples dancing in “sets” with a number of other couples.
You don’t need to bring a partner – they are often available before each individual dance.
Live music is very much the norm
Typical bands have 3-7 members who make at best a very small proportion of their incomes playing for dancing.
Instruments are pretty diverse although Melodeons and Fiddles are popular.
It is always assumed that the audience have never danced before and a caller explains each dance before it starts. There are very few “workshops” or other formal instruction arrangements.
Typical venues include public halls, community centres and (at some festivals) special purpose marquees
Almost all ages are represented
Entrance fees are around £10 for an evening from 8pm-11:30pm
There are no competitions, medals, etc.
Special clothes are not expected. Cowboy outfits are sometimes worn by novices. Sportswear is not unusual.