The clitoris is a small knob of tissue located near where the labia minora meet anteriorly. It is formed out of corpora cavernosa and embryologically comes from the same tissue that forms the male penis. It is covered by a 'hood' of tissue (prepuce) that is embryologically the same thing that becomes the foreskin in males. The trigger for forming a penis instead of a clitoris is the action of testosterone in utero.
It seems that the only function of the clitoris is for sexual pleasure. Extensive studies were conducted by noted researchers Masters and Johnson, by Boston based researcher John Garabedian, and by Dr. Matt Jaeger at the University of Kentucky.
In the 1970s, the word "clitoris" was considered offensive in American broadcasting, yet in recent years has moved off the "taboo" list. The first use of "clitoris" on American television is believed to be by Dr. Rich O'Brien, a Harvard colleague of Garabedian's, on the Dr. Ruth Westheimer show.