Grigory Potemkin was a minister and lover of the Russian Empress Catherine II. After the Russian annexation of Crimea from the Ottoman Empire and liquidation of the Cossack Zaporozhian Sich (see New Russia), Potemkin became governor of the region. Crimea had been devastated by the war, and the Muslim Tatar inhabitants of Crimea were viewed as a potential fifth column of the Ottoman Empire; Potemkin's major tasks were to pacify and rebuild by bringing in Russian settlers. In 1787, as a new war was about to break out between Russia and the Ottoman Empire, Catherine II with her court and several ambassadors made an unprecedented six-month trip to New Russia. One purpose of this trip was to impress Russia's allies prior to the war. Another purpose was to familiarize herself, supposedly directly, with her new possessions. To help accomplish this, Potemkin set up "mobile villages" on the banks of the Dnieper River. As soon as the barge carrying the Empress and ambassadors arrived, Potemkin's men, dressed as peasants, would populate the village. Once the barge left, the village was disassembled, then rebuilt downstream overnight.
Modern historians are divided on the degree of truth behind the Potemkin village story, and some writers argue that the story is an exaggeration. According to Simon Sebag-Montefiore, Potemkin's most comprehensive English-language biographer, the tale of elaborate, fake settlements with glowing fires designed to comfort the monarch and her entourage as they surveyed the barren territory at night, is largely fictional. Aleksandr Panchenko, an established specialist on 19th-century Russia, used original correspondence and memoirs to conclude that the Potemkin villages are a myth. He writes: "Based on the above said we must conclude that the myth of 'Potemkin villages' is exactly a myth, and not an established fact." He writes that "Potyomkin indeed decorated existing cities and villages, but made no secret that this was a decoration".
The close relationship between Potemkin and the empress would make it difficult for him to deceive her. Thus, the deception would have been mainly directed towards the foreign ambassadors accompanying the imperial party.
Although "Potemkin village" has come to mean, especially in a political context, any hollow or false construct, physical or figurative, meant to hide an undesirable or potentially damaging situation, it is possible that the phrase cannot be applied accurately to its own original historical inspiration. According to some historians, some of the buildings were real and others were constructed to show what the region would look like in the near future and at least Catherine and possibly also her foreign visitors knew which were which. According to these historians, the claims of deception were part of a defamation campaign against Potemkin. According to a legend, in 1787, when Catherine passed through Tula on her way back from the trip, the local governor Mikhail Krechetnikov indeed attempted a deception of that kind in order to hide the effects of a bad harvest.