Raki is an anise flavored spirit native to Turkey made from double distilling pomace (the leftover skins and seeds from winemaking, called suma in Turkish) in a pot still, then flavoring the resulting spirit with aniseed. While the distillate itself is similar to grappa or marc (they're technically brandy), anise-flavored spirits are popular all around the Mediterranean: Pastis in the south of France, Ouzo in Greece, Sambuca in Italy, Anis in Spain, and Arak in the Middle East all share a flavoring agent.
Historically, raki was made using raisins as the sugar base for fermentation and distillation. In the southern part of Turkey, figs were sometimes used. In wine growing regions with access to fresh grapes, pomace was an inexpensive source of raw materials.
Raki as we know it today came into fashion in the late 19th century, when the Tanzimat period's liberal policies towards the consumption of alcohol allowed many Muslims to visit local meyhanes, a kind of restaurant that served alcohol. Before this time, meyhanes were popular with the Greek and Albanian population of the Ottoman Empire and mainly served wine, but with a new clientele, raki consumption increased dramatically. Along with this rise in consumption came standardization of the production processes used to make the spirit.
After the collapse of the Ottoman Empire and the founding of the Republic of Turkey in 1923, the production of alcohol was given to a state-owned monopoly called Tekel, who opened a raki production facility in Izmir in 1944. With the privatization of Tekel in 2004, many brands of raki have sprung up, including Yeni Raki, Efe Raki and Tekirdag Rakisi.
Raki, like all spirits with a high concentration of anethole, will louche, turning milky with the addition of water. This is due to anethole's solubility in alcohol, but not in water. Adding enough water to an alcohol-anethole solution will make a cloudy emulsion.