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Clan badges evolved from the custom of retainers wearing the badge of their employer strapped to their arm when going about their business. In the feudal sense, at least in Scotland, this "employer" was the local "chief". Over the years, two things happened: (1) the badges slowly morphed into crests, and (2) the custom of strapping the badge to the arm was replaced by the wearing of a pin, representative of the badge within a coiled strap. Although many are quick to suggest that the "clansman's badge" is a 19th century invention, there is ample evidence-- in the form of livery buttons, etc.-- to suggest that the custom (and specific shape of the badge) was alive and kicking in the 17th and 18th centuries, albeit in it's original, intended, function.
In the strictly modern sense the clansman's badge did gain popularity in the 19th century-- there are literally dozens to be seen in "The Highlanders of Scotland", a series of watercolours painted by Kenneth Macleay in the mid-to late 1860s. It is my opinion that most of those wearing "clan badges" in the portraits are doing so as "estate employees". In other words the badge probably had more to do with a form of "corporate" identity (the same as regimental badges in the army) than with actual clan affiliation by virtue of blood ties to an ancient chief. That said, there is no denying that those blood ties did exist-- probably most of the people employed on the estates of The Chisholm were named "Chisholm" and to some degree, from the chief on down, were in all likelihood related.
Since very few clansmen could prove descent from a chief, but all could claim "kinship", the clansman's badge gained in popularity in the l9th century as just that-- a badge of kinship that allowed the wearer a sense of personal identity as well as a sense of belonging to a special community-- his clan.
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