The term, Sanhedrin is the name of the Beth Din HaGadol (The Great Court) as it was called during the Second Temple Period. Most secular scholars are convinced that the term comes from Greek, though they admit that if so, the word has strayed considerably from its original meaning.
Our sages, however, suggest a more applicable derivation of the term. P'siqta D'Rav Kahana (chapter 25), teaches that the first part of the word, "sin," referring to the Torah that was received at Mount "Sinai," was combined with the second part of the word, "hadrin," meaning, "glorification," to express the Great Court's role, the glorification of G-d's Torah through its application. Rabbi Ovadia Bartenura suggests an alternative meaning (exegesis on Mishnah Sota, chapter 9, Mishnah 11). Also taking the term as a combination of two words to mean, son'im hadarath pan'im b'din, "foes (opposing litigants) give respect and honor to its judgment." Other commentators confirm his interpretation, suggesting further that the first letter was changed from "sin" to "samekh," at a later date (Tosofoth Yom Tov and the Maharal).
The Sanhedrin's origins begin with Moshe Rabbeinu (Our Master and Teacher Moses)'s appointment of seventy elders at Sinai, in accordance with HaShem's commandment. The lower courts of twenty-three members, Sanhedrin Qa`tanot, was also established by Moshe Rabbeinu. Only rabbis with semikhah (authentic ordination) could sit on these courts, which had the authority to judge capital cases, imposes lashes, and impose fines (lay courts composed of three non-ordained individuals are able to judge other civil matters).
The Great Sanhedrin sat in the Lishkath Hagazith (the Chamber of Hewn Stone), which was situated in the Temple Courtyard. Forty years before the destruction of the Beth HaMiqdash (the Temple), the Sanhedrin exiled itself from the Temple Courtyard ('Avodah Zarah, 8b) and suspended its ability to preside over capital cases. Its exile "to the marketplaces," was meant to awaken the populace to repentance so that Heaven's decree of destruction could be averted.
After the revolt against Rome, and the destruction of the Temple, the seat of the Sanhedrin moved to the village of Yavne. Yavne remained the center for Torah until the Bar Kokhba revolt, in the aftermath of which the Sanhedrin was outlawed by the Romans and many of the leading rabbis were executed. Surviving members of the Sanhedrin, including many of Rabbi Aqiva's students, fled to the Galil (Galilee), establishing Usha as the Sanhedrin's new seat for a short time. It is there that many important enactments, known as "Taqanoth Usha" (the Usha Enactments) were adopted. The seat of the Sanhedrin then moved to the village of Shefar'am. From there the seat of the Sanhedrin moved to Beth She`ar'im, the home of Rabbi Yehuda HaNassi, the editor of the Mishnah. Near the end of his life, Rabbi Yehuda HaNassi, moved to Tsipori (Sepphoris), as did the seat of the Sanhedrin. One hundred and sixty-five years after the destruction of the Second Temple, the Sanhedrin moved to `Tveryah (Tiberias) which would become its final seat until its reestablishment this year in that same city.
From the destruction of the Temple onward, the power of the Sanhedrin steadily declined, especially its power over civil affairs. Yet, despite the growth of Bavel (Babylonia) as a Torah center, the Nassi was still the recognized leader of the entire world Jewish community. Semikhah was only recognized when carried out by rabbis of Erets Yisrael with the approval of the Nassi. In addition, one of the most important functions of the Sanhedrin was the fixing of the calendar (and therefore the dates of the holidays), including the declaration of a new month, and the intercalation of the year by adding of an additional month (Second Adar). In the year, 4118, the Nassi, Hillel II, fixed the Jewish calendar, calculating it for all future generations, thereby effectively renouncing his authority over the world Jewish community. Seventy-one years later the position of the Nassi and the Sanhedrin was abolished entirely (see Ramban's commentary, Gi`tin, 36a).
With the decline and eventual disbandment of the Great Sanhedrin, along with the general decline of the Jewish community in Israel, official ordination, semikhah, soon ceased. Since then, however, there have been a number of attempts to renew semikhah. The most notable was in the year 5298 (467 years ago), when the rabbis of Tsfath (Safed) led by Rabbi Ya'aqov Birav made an attempt to gain a consensus of all the sages in the Land of Israel (as prescribed by the Rambam). In fact, the rabbis of Tsfath composed a letter declaring their intentions to bestow upon Rabbi Birav semikhah, signing it and sending it to other rabbis of Israel, including Rabbi Lewi ben Haviv, who was the chief rabbi of Jerusalem at the time. He, along with the Radbaz, was against the idea of renewing semikhah, based on a different understanding of the relevant passages of the Rambam. Therefore, the attempt failed.
Now, the story has come full circle. Through the efforts of HaRav HaGaon Dov Levanoni and others, authentic semikhah has been renewed, through the approval of all Hakhmei Yisrael (Sages of Israel), and the Great Sanhedrin has been reestablished. May the day soon come, when, as it is written (Talmud, Masekhet `Iruvin 43a), the prophet Eliyahu (Elijah) will stand before it to reveal the identity of the MashiaH, and the final chapter of our Redemption will commence.