The methodology, which is increasingly being replaced by agile methods / rapid prototyping, gets its name from the following figure, which looks like a waterfall:
The diagram resembles a waterfall, where each downstream activity falls off from the upstream activity above it. This step by step processing required users to come up with all requirements prior to analysis / design. During the mainframe era of IBM / Unisys mainframes and green screens, this methodology as a structured approach to analysis/design/development/deployment reigned supreme.
However, the limitations of this methodology became apparent, as the world moved to client / server computing. Users found out what they really required, once they saw a complete system. Hence, rapid prototyping, agile methods / extreme programming under a spiral model increasingly gained foothold.
Consequently, waterfall methodology is just a dark reminder today of how things were, pre Web 1.0. If your manager still believes that all requirements be frozen prior to developing something, lead him to spiral modeling for the benfit of your users / customers, who are the ultimate users / validators of the systems you build and deploy in the current Web 2.0 world.
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