Cthulhu (pronounced "Khlûl'hloo" or "Kathooloo") (Other spellings: Kutulu, Ktulu, Cthulu, Kthulhut, Thu Thu, Tulu) is a Pre-Judeo-Christian deity/demon variously described as a "sleeping" or "dreaming" creature whose worshipers' thought spoke to them in dreams. It's influence began in the Middle East (in areas now under Islamic control) and extended to Greenland, China, New Zealand and perhaps, America.
Cthulhu's exact origin is uncertain, though it is believed to be one of the pagan gods worshiped in ancient Babylon. This uncertainty arises as very little first-hand information about Cthulhu still exists. What is known about Cthulhu comes to us from a patchwork of old biographies and obscure references in related work.The 13th Century Muslim scholar Ibn Khallikan (Abu-l ‘Abbas Ahmad ibn Khallikan (Arabic: أبو العباس أحمد ابن خلكان)) wrote a biography of the only publicly known adherent, Abdul Alhazred (Abd-el-Hazred,Arabic: عبدالله الحظرد, "he prohibited"), a Yemeni Muslim of the 7th Century A.D. who
is said to have flourished during the period of the Ommiade caliphs, circa 700 A.D. He visited the ruins of Babylon and the subterranean secrets of Memphis and spent ten years alone in the great southern desert of Arabia — the Roba el Khaliyeh or "Empty Space" of the ancients — and "Dahna" or "Crimson" desert of the modern Arabs, which is held to be inhabited by protective evil spirits and monsters of death. Of this desert many strange and unbelievable marvels are told by those who pretend to have penetrated it. In his last years Alhazred dwelt in Damascus.Alhazred wrote a book regarding his findings, and the influence of Cthulhu on his faith, titled al-Azif" in 738 A.D. Supposedly translated into Latin, no copies are said to survive to today as Khallikan reported that the Islamic Caliphate of the time deemed the book sacrilegious and evil and had all known copies burned.
It was believed that Cthulhu worship died out as a result of these efforts, as there is little mention of any parishioners in subsequent Catholic or Protestant writings. The Malleus Maleficarum (English: The Witch Hammer) a guidebook published in 1486 to help priests and laity in Biblically dealing with witches and witchcraft, makes no mention of Cthulhu or its followers. 
In AmericaHowever in 1926, during a period of massive unrestricted immigration to the United States, investigative journalist Howard P. Lovecraft published an expose about the reappearance of American versions of the cult in Massachusetts and Louisiana. The article, titled "The Call of Cthulhu," is a first person retelling of his findings. From his account:
So a body of twenty police, filling two carriages and an automobile, had set out in the late afternoon with the shivering squatter as a guide. At the end of the passable road they alighted, and for miles splashed on in silence through the terrible cypress woods where day never came. Ugly roots and malignant hanging nooses of Spanish moss beset them, and now and then a pile of dank stones or fragment of a rotting wall intensified by its hint of morbid habitation a depression which every malformed tree and every fungous islet combined to create. At length the squatter settlement, a miserable huddle of huts, hove in sight; and hysterical dwellers ran out to cluster around the group of bobbing lanterns. The muffled beat of tom-toms was now faintly audible far, far ahead; and a curdling shriek came at infrequent intervals when the wind shifted. A reddish glare, too, seemed to filter through pale undergrowth beyond the endless avenues of forest night.Lovecraft transcribed the words used as part of the "rite" he was able to observe as Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn. He wrote that this translated into English as "In his house at R'lyeh dead Cthulhu waits dreaming."
Over the ensuing years, Hollywood as well as popular novelists have kept Cthulhu "alive" in numerous written stories, games, TV shows and movies, by combining real (and dangerous) rites recounted by Lovecraft with fictional ones of their own creation. This only contributes to the confusion regarding what -- and how dangerous -- "Cthulhu" really is.