It started back around the 1500- 1600's.  In Britain, artists were known as screevers, and started back around 1550.  Their subjects were more based on the written word and political lampooning.  

In Italy in the 1600's, artisans who had finished jobs in the great cathedrals, often took to the plaza in front of the church, and drew reproductions of the paintings inside.  The public would throw coins at the artists as they worked, to show their appreciation.  Many of the works were religious in nature, usually of the Madonna and child, thus the name Madonnara became the term used to describe this kind of artist in Italy.

Source:      International Street Painting Society