Dazzle painting began on land when a French artillery officer painted his guns in contrasting geometrical shapes to try and break up their outlines. It only went to sea much later.
All of the smaller ships had begun painted grey to try and blend into the colours of the sea and haze. That great capital ships had not started the war painted like this because their peace time purpose had been to be as visible as possible in order to project an image of power. This changed to soon changed to grey, but there is no way that you are really going to hide something as big as a battleship.
An RNVR officer called Norman Wilkinson come up with the idea that instead of trying to hide it you should try to break up its outline so to make it harder to hit. Wilkinson was born in 1879 and was an artist in civilian life. When the war broke out he was initially placed on board a submarine in the eastern Mediterranean, before later serving on mine sweeper.
There is an idea that the dazzle paint was to act a bit like the stripes on a Zebra and create an optical illusion so to look like where it was not. This is not the case. Battleships were simply so big and moved comparatively slowly so that the difference that this optical illusion created was less than the normal error that the gunners would expect from their guns.
Dazzle painting was actually designed so that when seen from the surface of the sea it became difficult to tell what direction a ship is travelling in by breaking up the ship's outline.
After the idea was accepted by the Admiralty Wilkinson went ashore to perfect the scheme in the basement of the Royal Academy of Art. Paint schemes for different types of ship were tested on models before being sent off to dockyards to be transferred onto the ships themselves.
The United States Navy also adopted dazzle painting after the USA joined the war, and Wilkinson was sent over to teach it to them. However, after the war there was some debate about the effectiveness of the paint scheme. It was abandoned in favour of grey, but did make a re-appearance on some ships during the second world war before being abandoned again.