If the authors of the Randel Survey had their way, there would be nothing special about the intersection of Seventh Avenue with West 42nd Street, but unfortunately the surveyors had made the mistake of assuming that Manhattan's populations would settle along the rivers and thus built the avenues closer together there. As settlement proceeded, it became clear that the opposite would be true, and as avenue real estate was more expensive, extra avenues would have to be installed. Lexington and Madison were thus laid out, and rather than being demapped like the Eastern Post Road, the Bloomingdale Road became the northern extension of Broadway, once fated to end on 23rd Street.
Broadway became an important thoroughfare, and there were proposals going back to the 1870s for a subway underneath it (the Beach Pneumatic Subway). Proposals only became serious in the 1890s, by which time Broadway interests were concerened about the disruption that subway construction would cause. That and the desire by the city to provide a route to Grand Central Depot caused the selection of the Elm Street-4th Avenue route on the East Side. Nevertheless, with Park Avenue blocked above 42nd Street, the subway had to choose another route to go further uptown and so swung westward to get to Broadway at Longacre Square.
Longacre Square at the time was the center of the city's carriage trade district (19th century equivalent of auto garages) and was so named because London's Longacre Square had the same function. In 1901 the New York Times moved its headquarters to Longacre Square from Park Row, following the New York Herald which moved to Herald Square 10 years before. The New York Times wanted to be honored with its own square just like the Herald. IRT President August Belmont was a shareholder of the New York Times, and the IRT and Times made a deal to promote the paper: The station would be called Times Square. The city would only make the change official one year later.
Even with the Times there, this was still not a popular destination, so the IRT designed a standard local stop, including an underpass. As Times Square grew into the center of the city's entertainment district, this came to be inadequate. In the 1910s, with the original subway route maxed out, work begun on new lines as part of the Dual Contracts. The BRT was awarded with a subway underneath Broadway and the IRT got one under 7th Avenue, which would serve the new Penn Station. The IRT split itself into separate east and west side routes, keeping the 42nd Street section as a shuttle linking them. The original local station, now the shuttle station had a new platform added to allow three tracks to remain in use.
As the BRT was a separate, private company, they charged a separate fare; while one could transfer between them without going up to the street, one had to exit through one set of turnstiles, and then re-enter through another set, paying another fare.
Things got more interesting in 1927 when the IRT Steinway route was extended west from Grand Central and 5th Avenue under 41st Street (42nd was occupied by the shuttle, the line switches over under Bryant Park). Because of the depth of the line, both from its tunnel under the river and from the need to get underneath all of the other subway lines at Times Square, a series of switchback ramps would bring passengers down. Ramps have a larger throughput than stairs.
The final player in the Times Square game was the IND, which built a subway under Eighth Avenue (it was the only unused avenue left) in 1932. In order to provide convenient access to the IRT lines at Times Square, a tunnel was built under 41st Street, even though a separate fare would be required, as between the IRT and BMT.
On June 1, 1940, the city bought the BMT, joining the IND which the city already owned. The IRT followed 10 days later. In 1948, as a concession to passengers for an increase of the fare from 5 to 10 cents, free interdivisional transfers were implemented. The turnstiles at the BMT station were rearranged to allow free transfers between the two divisions. Even with interdivisional transfers, the 41st Street passage remained outside fare control.
Bringing more into the Times Square complex, the Port Authority Bus Terminal opened in 1950, providing direct access to the both 42/8 and Times Square via the IND mezzanine and the 41st Street passageway.
From its opening, there was no transfer between directions at 42/8, because of its incredibly staggered platforms, which were built like that to maximize available width without underpinning buildings. In later years, transfers between platforms became possible by using the lower level platform. In 1988, with a renovation of the mezzanine, the fare controls were reconfigured to allow a free transfer between directions. As a result, the 41st Street passageway was moved into fare controls, and exits to 43rd and 8th had to close.
Renovation of Times Square began in 1998, and because of the scale of the station, continue to this day. One major aspect of the renovation involved replacing the original ramps to the BMT platforms with stairs and elevators. Also replaced were 8 narrow stairways from the Flushing mezzanine to the 7th Avenue line platforms, with 4 wide stairways. With the construction of new buildings for Reuters and Ernst and Young at 42nd and 7th, new in-building escalators improved access over former street level stairways. A surface level mezzanine was added on the southeast corner, now integrated into the new building there.
Times Square, the intersection is structurally little different from Herald Square, its existence as the "crossroads of the world," and its having the largest subway complex in the city was caused primarily by two factors: Grand Central's presence causing the original subway to swing westward, and the first Zoning Law in the United States, passed by the city in 1911, which ended the march of the city's northern central business district northward and locked it in as ending at 60th Street. Columbus Circle was built because it was expected that one day the city's theater district would be there. Columbia University moved to its current location expecting to be near the city's central business district one day. Neither came to be. Times Square is likely to remain the center of the city, and the "Crossroads of the World" for some time to come.
With the today's choice by the International Olympic Committee of New York as one of five finalist cities for the 2012 Olympics, Times Square station may yet see another change, as the 7 may be extended westward.