History

For many centuries, small breeds of spaniels have been popular in the United Kingdom. Some centuries later, Toy Spaniels became popular as pets, especially as pets of the royal family. In fact, the King Charles Spaniel was so named because a Blenheim-coated spaniel was the children's pet in the household of Charles I. King Charles II went so far as to issue a decree that the King Charles Spaniel could not be forbidden entrance to any public place, including the Houses of Parliament. Such spaniels can be seen in many paintings of the 16th, 17th and 18th centuries. These early spaniels had longer, pointier snouts and thinner-boned limbs than today's.
Over time, the toy spaniels were replaced in popularity by short-snouted, dome-headed dogs of Asian descent, such as the Pug and Japanese Chin. The King Charles Spaniel was bred with these dogs, resulting in the similar-shaped head of today's English Toy Spaniel breed. The King Charles Spaniel remained popular at Blenheim Palace, home to the Dukes of Marlborough, where the brown and white version was the most popular - resulting in the name Blenheim for that color combination.
In the 1920s, an American named Roswell Eldrige offered twenty-five pounds as a prize for any King Charles Spaniel "of the old-fashioned type" with a longer nose, flat skull, and a lozenge (spot) in the middle of the crown of the head, sometimes called "the kiss of Buddha," "Blenheim Spot," "lozenge" or "Kissing Spot". So, the breed was developed by selective breeding of short-snouted Spaniels. The result was a dog that resembled the boyhood pet of the future Charles II of England ("Cavalier King Charles"), hence the name of the breed.

Source: wikipedia.org