The chicken is marinated in curd and seasoned with tandoori masala. It is moderately hot, but the heat is reduced in most Western nations. Cayenne pepper, red chili powder or Kashmiri red chilli powder is used to give it a fiery red hue. A higher amount of Turmeric produces an orange colour. In some modern versions, both red and yellow food colourings are used. It is traditionally cooked at high temperatures in a tandoor (clay oven), but can also be prepared on a traditional barbecue grill.
The story of its origins lies with a man named Kundan Lal Gujral, who ran a restaurant called Moti Mahal in Peshawar in undivided India. Trying out new recipes to keep his patrons interested, Gujral tried cooking chicken in tandoors (clay ovens) used by locals until then to cook naan bread. The tandoors are bell-shaped ovens, set into the earth and fired with wood or charcoal reaching temperatures of about 480 °C (900 °F). Gujral was able to cook the tender chickens is making them succulent inside and crispy outside.
After the partition in 1947, Punjab was partitioned with the Eastern portion joining India and western Pakistan. Peshawar became part of Pakistan and Gujral found himself one among many Hindu refugees fleeing the rioting and upheaval by moving to India. He moved his restaurant to Delhi in a place called Daryaganj.
The Tandoori chicken at Moti Mahal so impressed the first Prime Minister of India, Jawaharlal Nehru, that he made it a regular at official banquets. Visiting dignitaries that enjoyed Tandoori Chicken included American Presidents Richard Nixon and John F. Kennedy, Soviet leaders Nikolai Bulganin and Nikita Khrushchev, the King of Nepal, and the Shah of Iran.
The fame of Tandoori Chicken led to many derivatives like Chicken Tikka (and eventually the Indian dish popularized in Britain Chicken Tikka Masala), commonly found in menus in Indian restaurants all over the world.
The above excerpt is from Wikipedia – I have included a detailed Chicken tandoori recipe in my book and it can be cooked easily at home.