The Lazarus project has its roots in Megido. From Google Groups we can reconstruct that Megido was a project that attempted to make an open source clone of Sybil, which was alike Delphi, but its designer was more constrained. Megido started in 1998, but died somewhere in 1999, due to lack of focus, and lack of interest for a Sybil clone with its restrictions.
So, Lazarus was started in February of 1999. It was primarily founded by three individuals: Cliff Baeseman, Shane Miller, and Michael A. Hess. Of the three founders, only Michael A. Hess is still involved with the project.
All three had attempted to get involved with the Megido project which dissolved. In frustration they started their own, the Lazarus project.
The next oldest member of the team is Marc Weustink. He got involved with the project in Aug. 1999. Marc was looking for a Delphi on Linux solution (as there was none at the time from Borland), and was also interested in Linux in general, therefore joining the Lazarus project. At the time Marc joined, Lazarus was not much more than an empty toolbar and some hardcoded gtk menu items. The editor was still being discussed. Marc is still a core contributor, with the debugger interface being his pet subproject. (TODO: more?)
Following him is Mattias Gaertner who got involved in Sept. 2000. [TODO, add some more info?]
Micha Nelissen started contributing in June 2003, mainly sending patches for the win32 interface. Micha used Borland C++ Builder, but wanted to look into more platforms as well. Due to Borland adding their own proprietary extensions to C++ to support their VCL, the odds of BCB applications to ever going to be portable were slim. A change of language was not really a problem so after some looking around, Lazarus seemed most promising. When encountering the project, Lazarus was working quite ok on linux with gtk, but the win32 version was very buggy, and Micha thought it was about time to fix it.