The Sublime Ottoman State which was reigned from around July 1299 to October 1923 was usually referred to as the Ottoman Empire, the Turkish Empire or more commonly Turkey by its contemporaries.
The Ottoman dynasty was named after a tribal leader called Osman. Osman was the the leader of a small band of nomadic Oguz Turks in the north western Anatolia situated on the Byzantine border and was admired as a strong and dynamic ruler for a long time even after his death. In fact, there is a popular old Turkish phrase which meant, "May he be as good as Osman." This empire emerged after destruction of the Byzantine Empire and hence history has often related the birth of the Ottoman Empire to the death of Byzantium Empire.
By the year 1300, most of Anatolia, excluding the areas around the Marmara Sea and Trabizond in the north-east, was ruled by small Turkish principalities, after the destruction of the Seljuk Sultanate of Rum by the invading Mongols. Majority of the population of Anatolia was converted to Turkish beliefs by the principalities.
The principalities were varied in character. While some were founded by the former nobles in the Seljuk Sultanate, and were the natural successors of the old Seljuk order, others were little more than coalitions of nomadic tribes which came to Anatolia with the Mongol flocks, and finally the 'gazi' states which were founded on the border with Christianity. These gazi principalities, including Osman's acquired territories, on one hand, constantly raided the Christian lands in the north and west while on the other hand, they also interacted with the Christian peoples in peaceful ways such as trade.
Also, a significant portion of their population consisted of Christians. Additionally, the eastern Mediterranean trade was dominated by the Italian city states which were ruled by the Venetians and the Genoese while some places were either under the Latin rule or were a part of the Empire.
It was the same time in which the western mode of production and feudal relations were rapidly replacing the traditional Eastern rural and urban communities. Since the mechanisms of Byzantine rule was based on these traditional eastern, it found no place under the Western philosophy and was doomed to die.
With the feudal and traditional factions fought for supremacy within the dying Byzantine Empire, its Western and Islamic enemies expanded into its remaining lands. Forseeing the danger in 1302, the Empire sent an army of 2000 soldiers against Osman. Osman, with his few hundred tribal horsemen, however, managed to destroy the Byzantine enemy.
Osman was replaced as Bey by his son Orhan, who continued to expand his state against the Byzantines. By 1352, he had taken Bursa, Nicea and Nicomedia. Orhan later married a Byzantine princess during the Byzantine civil war. He also managed to expand against other Anatolian principalities, a task that required diplomatic skill in addition to military might, as war against other Muslims is forbidden in Islam.
When the Ottomans annexed Muslim lands, they had to come up with some legal or diplomatic justification. In many cases they justified their war against Muslims as war against heretics who sided with the infidels against the gazi state of the Ottomans. Ottomans used this justification many times when fighting other Muslim forces such as Karaman, Akkoyunlu, Memluks and Safavids.
Instead of Osman, Orhan is believed to have laid the foundation of the Ottoman state as many of the classical features of the Ottoman state were established by Orhan. By 1352, Byzantium was no longer the main enemy, and Orhan already ruled not just a band of nomads, but possibly the strongest, richest and one of the most dynamic state in Anatolia and the Balkans, which covered all of north-western Anatolia from Ankara to the Marmara Sea.