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The inverted pyramid is a metaphor used to illustrate how information should be arranged or presented within a text, in particular within a news story. Despite the name, the figure is almost always drawn simply as an equilateral triangle with an apex pointing downward, rather than a three-dimensional pyramid.
The triangle's broad base at the top of the figure represents the most substantial, interesting, and important information the writer means to convey. The triangle's orientation is meant to illustrate that this kind of material should head the article, while the tapered lower portion illustrates that other material should follow in order of diminishing importance.
This format will allow the less important information to be more easily cut out of the article to fit a fixed size (number of words, printed size, etc.).
History
Historians disagree about when the form was created. Many insist the invention of the telegraph sparked its development, by encouraging reporters to send the most important facts first so that if the transmission was interrupted, the focus of the story would survive. Studies of 19th century news stories in American newspapers, however, suggest that the form spread more widely several decades later than the telegraph, possibly because the reform era's social and educational forces encouraged factual reporting rather than more interpretive narrative styles. In addition, having less-essential facts at the end simplified the process of shortening a story after it had been set in type.
Chip Scanlan's essay on the form includes this frequently-cited example of telegraphic reporting:
'Who,' 'when', 'where', 'what' and 'how' are addressed in the first paragraph. As the article continues, the less important details are presented. An even more pyramid-conscious reporter or editor would move two additional details to the first two sentences: That the shot was to the head, and that it was expected to prove fatal. However the transitional sentence about the Grants suggests that less-important facts are being added to the rest of the story.
The inverted pyramid is somewhat similar in principle to the spiral approach sometimes used in teaching, where the important, basic facts are covered first and reemphasized often to help get them encoded into long-term memory.
References
"Inverted pyramid"