The diamond was found in the 17th century in Golkonda, India. According to one legend, a French soldier who had deserted during the Carnatic wars in Srirangam disguised himself as a Hindu convert in order to steal it in 1747, when it served as the eye of a temple deity.
The as yet unnamed stone passed from merchant to merchant, eventually appearing for sale in Amsterdam. Shaffrass, an Iranian millionaire who then owned the diamond, found an eager buyer in Count Grigory Grigorievich Orlov. The Count paid a purported 1,4 mln Dutch florins.
Count Orlov had been romantically involved with Catherine the Great of Russia for many years, and he led the way in the dethronement of her husband in a coup d'état and the elevation of Catherine to power. Their relationship carried on for many years and produced an illegitimate child, but Catherine eventually forsook Count Orlov for Grigori Alexandrovich Potemkin. Count Orlov was said to have tried to rekindle their romance by offering her the diamond, as it is said he knew she had wished for it. While he failed to regain her affections, Catherine did bestow many gifts upon Count Orlov; these gifts included the Marble Palace in Saint Petersburg. Catherine named the diamond after the Count, and she had her jeweller design a sceptre incorporating the diamond. Now known as the Imperial Sceptre, it was completed in 1774.
Actually, as the researchers prove, Catherine herself bought the diamond and only used Orlov's help with the deal and delivery, inventing the story about his generous present only to avoid criticism for spending the state's budget on jewelry. The Russian empress was very fond of diamonds, and she put them into fashion at her court and even called her personal stallion Diamond. In the 18th century, the sum of 1,4 mln florins was so immense that only the empress herself could afford it, and Count Orlov did not have such a fortune. Also, it is known that the precious stone was bought by instalments for 7 years, and when Count Orlov was going to pay the first payment, he discovered that it had already been paid from the empress's personal account.
According to wikipedia