The Mudi was discovered as a local Hungarian herding dog type with strong existing breed characteristics and was not created by human dreams of an ideal herding dog, but by need and performance selection. Its origin reaches well back into the 15th to 18th centuries, but the exact time is hard to pinpoint because of the confusion in the nomenclature of the different herding dog breeds of that time and place.
The official Latin name for the breed is Canis ovilis Fényesi, and is named for the breed's discoverer, Dr. Dezsõ Fényes. It was in 1936 that Dr. Fényes's discovered breed, in that time known as the "Driver Dog", was recognized as a breed in Hungary, though common knowledge of the breed appears much earlier on this timeline of the Mudi's existence and discovery than the 1920's.
In Hungarian documents from the 17th-18th centuries, description was found of a herding dog with pricked ears and fur like a Mudi has, but were called "Puli's", as well as in the earliest written records of a very similar breed in Croatia, noted in documents dating back to the 14th and 15th centuries. Even as late as 1902, Lajos Méhely wrote a description of the "Puli", in "The World of Animals" as one of a dog with a jackal like face, pricked ears and mid long wavy fur, if we think of todays Puli this is surely not what we see.
This breed name confusion of the local herding dog types leads to the common belief of the Puli being the oldest herding breed in Hungary and that the Mudi and Pumi were formed from the Puli. It was the general supposition from this name confusion, as was written in 1936 by Dr. Csaba Anghi in "The Mudi, or the Driver Dog of Shepherds", and the then resulting belief that Puli's were the oldest Hungarian herding breed, that the Puli's were crossed with spitz type breeds to create the "newly" discovered Mudi.
It is possible that the Mudi, with its outlook and behavior and its many ancient features, is from crosses of the spitz type breeds with other naturally occurring herding breeds of the time and area. The one main exception to the spitz type being the quite wavy to curly coat that the Mudi exhibits. But as the Mudi was only officially recognized as a breed in 1936, and its history is not precisely known, the common myths filled in the uncertainties and blank periods with what is presently told of its origins.
It is interesting to note as well that into the 20th century, it was not uncommon for Mudi-like puppies to be born into Puli litters and even today, Mudi-like puppies can be born into Pumi litters, but Pumi-like or Puli-like puppies have not been seen born in Mudi litters.
During the 2nd World War, many Hungarian breeds suffered terrible losses, some almost disappeared and the Mudi was given no immunity as a rare breed. In the 1960's, it was rehabilitated from survivors and in the 1970's, a few kennels worked to revive the breed to its original status in Hungary. It was never a popular breed in its country of origin but always from Dr. Fényes times, it was loved and mentioned as being among the best herding breeds, as well as a good hunting dog, watchdog and companion.
As the restoration of the breed went on over the next few decades after the 1966 standard was written, and the reality of the naturally occurring variability was seen in color, a new standard was written in 2000 to add back most of the original colors. Even this year (2004), the fakó color (yellow or fawn color translation) is being added to the English, French, German and Spanish versions of the FCI standard, to correct the error that was made in translation of the Hungarian 2000 standard, that consequently omitted the translated term for this color.
Even though the Mudi is quite possibly an ancient breed living in a modern world, we should not forget that in today's world another natural herding breed that was developed and selected by shepherds over time, could probably never be recreated again as the real shepherds that herd with dogs everyday, are a dying breed themselves. The Mudi breed is possibly the last naturally developed herding breed that is still working with shepherds and livestock in Hungary today, the Mudi, the "Driver Dog" of Hungary, could never be reproduced in today's modern world.