George Melies accidently developed this technique when his camera had a misfunction and dropped a few frames. When viewing the film, he realised that the moving object he filmed disappeared where the camera stopped working. He used this technique to do lots of magical tricks. For example, he would film a magician and a girl, the magician would make a gesture and Melies stopped the camera. He told the girl to go out of sight and started the camera again. When viewing the finished film, it looked like the girl disappeared all of a sudden after the magician's gesture.
This is not to be confused with the stop motion technique.