The history of the shih tzu spans many hundreds of years and began in modern day China. Today these dogs are the trusted companions of millions of young children and families for the very same reasons they were once the canine choice of imperial ladies in waiting.
It is thought that the origins of the shih tzu go back nearly 3,000 years when Tibet sent gifts of these dogs to the Imperial palace. There are reports of small "under table" dogs who picked up scraps and alerted their keepers (usually eunuchs who ran many functions of the imperial household) of anything approaching the castle.
Their appearance, as one who'd never seen a lion might imagine one, also suggests they came from further west. However, the breed of shih tzu as it is known today is largely to the efforts of the last Imperial ruler of China, the Empress T'zu Hsi. For nearly 50 years, until the early 20th century, she ruled either as regent or as the empress in her own right over the vast empire comparable to modern day China.
During all this, she also ran a breeding program to create perfect lines of shih tzu, pekinese and pugs. Detailed records (this was imperial China, after all) were maintained for decades with descriptions and breeding notes. Though it is thought that some of the eunuchs who actually cared for the dogs made some of their own crosses, the result was a surprisingly varied stock of shih tzu, that was in the process of becoming three distinct sub-breeds within the larger shih tzu breed.
However, when the pressures of Europe and modernization eventually forced out what had become an unpopular regime, the dogs were then taken from the palaces by the now stigmatized and recently unemployed eunuchs. As such, many dogs were exported out of the country at this time.
The early 20th century was very difficult on the breed and nearly all were wiped out - presumably they became extinct in China. Only 11 dogs are thought to have escaped to the west. In western Europe, breeding began in the 1930s and in earnest in the 1950s to produce the millions of dogs that now exist. Because there was such a significant bottleneck in the population, the breed is somewhat prone to a few congenital health problems.
Interestingly, shih tzus in the UK are nearly all descended from a single cross made in the 1930s with a straight-legged pekinese. As a result, most dogs in the UK are a bit taller than other shih tzus found worldwide. Other than that, it is a tribute to the Empress how much variation is still found today in the various coat colour combinations still seen in the breed.
Though they can be somewhat noisy, they are still very good at alerting a household to anyone who approaches. Furthermore, they were selected to be docile and easily handled. Because they were selected to bond very closely to humans, they are usually very loving and happy to follow you around the house all day long.