how was chess created and why?

Chess was created by the Goddess Caissa. You should know this. I don't know how she did it though.

It was invented by an Indian emperor who was trying to dickswing against his neighbour the Great King of Persia. He sent him a chess set and said "I bet your boys can't figure out how to play this game". Unfortunately, the Iranians did, and then sent back a backgammon set with the same message. This completely stumped the Indians, thereby proving the superiority of Iranian culture.

Or so the legend goes.

Hmm, well Persian culture is pretty impressive. They gave the Greeks and the Romans successively a run for their money. Are you sure Caissa didn't have anything to do with it?

Humans make up game all the time. Even today people come up with varients to chess. Obviously the same thing was happening 1000s of years ago.

So the game wasn't made, the rules slowly evolved. The rules that exist today are the ones that stood the test of time. The game has a good balance of strategy and tactics that, IMO, is not found in similar games (like shogi and go).

"Why" chess exists assumes there is a reason. Humans are creative and are sometmes bored.

Well Dionysus went to India at one point so maybe she went with him?

OK, so, serious answer: nobody actually knows. As with all old games, any attribution to a specific individual is legendary at best. It was probably invented some time around AD 500-600, and probably in India. It's likely that it evolved from earlier games, and also possible that the original game of chess was altered by contact with other games (for instance, that Chinese chess was its own, different, game, which merged with Indian chess). Certainly, the chess board long predates chess, and the game was presumably invented to be played on boards that already existed for other games (most obviously, draughts/checkers).

Dating is hard. It is usually taken as about AD 600 because that's when the first records of it can be found, but it's worth noting that Indian civilisation at the time had a much less literary focus than most other major contemporary civilisations, so it's possible it went a long time before being picked up in the historical record. (Notably, most of the first reliable records of it are Persian, even though they make clear it is an Indian import).

There is a school of thought that it originated in China and then spread westwards, but while this has apparently some merit from a gameplay-analysis perspective, it makes less sense from a cultural one. The earliest reconstructed chess setups feature infantry, elephants, cavalry and chariots, each representing part of the "ideal army" (plus the two commander pieces). This looks a lot more Indian than Chinese, for various reasons, but most notably the elephants, which remained extremely important in Indian culture and warfare to the time when chess was developed, but elephants were never really used in Chinese warfare at all. Since Chinese chess includes elephant pieces, this suggests that the game originated outside China.

As the game spread west it mutated, with some of the pieces adopting forms more familiar to western players, so elephants became bishops and chariots took on the shape of castles (but were still called "rooks", an evolution of the Persian name for chariots), while the old vizier piece became a queen. The movement of some of the pieces was adjusted with the final developments taking place around 1500 (the double-pawn opening move, and the "mad queen" movement which is now familiar).

Chaturanga was created as a way to teach military strategy in times of peace.

Chess gave me the unbearable lightness of being.