SD stand for Super Deform, which was first introduced originated from a contributed illustration of a junior high school student from Nagoya, by the name of Koji Yokoi to the 'Model News' magazine that Bandai was issuing in the 1980s. The illustration is a Gundam but with the weird proportion where the overall height of the Gundam is equal to 2 of its heads. This illustration interested the chief editor and so leading to Koji Yokoi serializing SD Gundam in 4 frame comics in 'Model News'.
The super deformed designs were suitable for capsule toys and so they were first merchandised as small SD Gundam-shaped erasers as part of the Gashapon series SD Gundam World in 1985. Built with a hole so they could be skewered into a pencil, the series was a hit with Japanese schoolchildren and the concept soon expanded to other forms of merchandising and media, including gunpla, manga, trading cards, anime and video games.
