Powered By GURPS
was Steve Jackson Games
' answer to the d20 system
craze that was hitting the industry right after the release of Dungeons and Dragons Third Edition
The d20 system was causing people to realize the usefulness of a generic system of rules, allowing publishers to focus on making modules and backgrounds for the RPG. Until now, that was exclusively the domain of the generic setting makers, such as Palladium Books (makers of Rifts, the Teenage Mutant Ninja Turtles RPG, and others), Hero System (makers of Fantasy Hero and Champions), FUDGE, and GURPS, of course. Arguably, GURPS was one of the most successful generic RPGs, so you can understand the threat posed by D&D, the 800 pound gorilla of roleplaying games, entering the generic RPG market.
Right before they had fully formed the idea, they had already made a few steps. GURPS had released a "GURPS Lite" edition, which contained the basic character generation rules and enough rules which would let you play GURPS very easily. (It was lacking some of the richer details of character generation, such as super powers and magic, but it had enough where you could easily fudge them in as a GM.) They made GURPS Lite a free PDF download so that the cost of enticing new players into the game was cheap. In addition, they also gave out printed copies in pamphlet style. (Similar to what Fuzion and FUDGE had done before them.) This was similar to the d20's equivalent system reference document.
The other step that they had made was that they had included GURPS Lite in their Discworld Roleplaying Game making it one of their first supplement books which could be considered a complete RPG by itself. Discworld a full copy of GURPS Lite, and additional rules so that you could fully play anything within the Discworld genre. Since it used the same rules as GURPS, it also allowed you to import rules and ideas from other GURPS books easily.
After they released Discworld, they realized that they had found a possible strategy for competing with the d20 System (which had already announced plans for d20 Modern). The first printing of Discworld wouldn't have the "Powered By GURPS" tagline, but subsequent ones would. In addition, they later launched other titles such as Transhuman Space and Hellboy with the Powered by GURPS tagline.
At first, they omitted the "GURPS" from the title of their books, to avoid giving people the impression that these were "yet more GURPS books" which were dependant on a library of GURPS rulebooks and supplements. Some newer releases would later add "GURPS" back in the title, however, such as GURPS WWII, GURPS Prime Directive, and GURPS Conspiracy X. They've been relatively inconsistant about the presence of GURPS in the title. For example, the titles of two new releases are Girl Genius Sourcebook and Roleplaying Game to the mouthful that is their "The Vorkosigan Saga Sourcebook and RPG (Powered by GURPS)"
They've always had much success converting other proprietary systems to the GURPS system, with a long list such as GURPS Bunnies and Burrows, GURPS Autoduel, as well as the ill-fated GURPS Vampire: the Masquerade. Their new strategy seems to be publishing the conversions as part of their "Powered By GURPS" line. GURPS Prime Directive and GURPS Traveller both seem to be having much success with this strategy.
List of some recent "Powered By GURPS" books: