Originally, this was the Bourne shell (named for its author Steve Bourne,) which was the default shell for Unix beginning with Version 7. It was proprietary to AT&T, which caused to to be cloned, extended and generalized in various ways. Nowadays, the /bin/sh entry is usually a link (hard or soft) to some other descendant shell which will respond by behaving as nearly like its illustrious ancestor as possible.
In Linux distributions, sh is the system shell, the shell which is used in most automated scripts. Build scripts in particular use this shell. In most distributions, /bin/sh is a symbolic (soft) link to /bin/bash, which is also the most commonly used command line interface for users. However some distributions, particularly those in the Debian family, now use /bin/dash as their system shell and link /bin/sh to it. dash is very similar in its syntax to bash but links to fewer libraries and therefore runs faster.