Excerpt from RFC2810:
The IRC (Internet Relay Chat) protocol is for use with text based conferencing. It has been developed since 1989 when it was originally implemented as a mean for users on a BBS to chat amongst themselves.
First formally documented in May 1993 by RFC 1459 [IRC], the protocol has kept evolving.
The IRC Protocol is based on the client-server model, and is well suited to running on many machines in a distributed fashion. A typical setup involves a single process (the server) forming a central point for clients (or other servers) to connect to, performing the required message delivery/multiplexing and other functions.
This distributed model, which requires each server to have a copy of the global state information, is still the most flagrant problem of the protocol as it is a serious handicap, which limits the maximum size a network can reach. If the existing networks have been able keep growing at an incredible pace, we must thank hardware manufacturers for giving us ever more powerful systems.