Vanilla came to Europe in the 17th century with the conquistadors of Mexico. It was used together with chocolate drinks and as a perfume.
Vanilla flavor comes from the fruit pod of the tropical orchid Vanilla planifolia. It grows on vines which use trees as support in the wild. Vanilla pods are harvested green and cured for several months, to develop the flavor with which you are familiar. The vanilla flavor is comprised of several hundred chemical compounds and is contained in the pod and the tiny seeds. The flexible pods are four or more inches long, and have a black-brown, wrinkled appearance.
Germans use the vanilla bean ("Vanilleschote") and vanilla sugar ("Vanillezucker") in their cooking, but not vanilla extract. Split vanilla beans (or pods) are soaked in milk or cream before making custards and puddings, or the seeds are scraped from the pod and beaten into batters and doughs. The seed pod is often placed in a jar with sugar to make vanilla sugar. Dr. Oetker sells "Bourbon Vanille-Zucker", as well as less expensive "Vanillinzucker" in small packets, which is used in recipes that would call for vanilla extract in the US.