London was the first region of the British Isles to have postcodes, the initial system having been set up in the 19th century - much earlier than than the rest of the country which only started using them in the 1960's.
The original postal district system was updated around the time of the First World War to something that looks far more like that which we see today, with the city divided into sectors based around the points of the compass.
The central area of London has its own two districts - East and West Central (EC and WC) - whilst the rest of the city is divided into the following: N, W, E, NW, SW and SE (NE and S were used for a time but were eventually deemed unnecessary).
Within each of these sectors every individual postal district also has a number attached to the letter prefix (for example, NW1) and, on first look, the way these areas are numbered is seemingly random but there is a reason for this arrangement: the most central district in each sector is assigned the number 1, but all the other districts in that sector are numbered alphabetically based on the name of the local delivery office.
Over time some of London's postcodes have taken on somewhat iconic status, and some of the city's more desirable areas are now referred to, in real estate parlance, simply by their postal district. In areas adjacent to these districts there can be huge differences in house-prices depending on the property's proximity to the supposedly desirable neighbouring district.
One piece of history that is of interest regarding London postal districts is the fact that, at one time, all of the capital's main sorting offices were connected by a special underground railway operated by the Post Office.