The city of Troy itself seems to have arisen out of a merger of the surrounding tribes for defensive reasons. The actual location was possibly discovered by the German archaeologist Heinrich Schliemann in the late nineteenth century at the modern Hissarlik in Turkey. Troy was said by Homer and others to have been incredibly wealthy. The strategic position of this Hissarlik site could have been the reason for this wealth, since it was positioned on the route toward between Greece and the Black Sea. Whether this is the actual site, and whether Troy even existed at all, is still to be debated, however.
The first mythical king of Troy was a man named Teucer. He was the son of a river god and a nymph. Upon his death, the throne was handed over to his son-in-law Dardanus, a son of Zeus and Electra. The next king was the son of Dardanus, Erichthonius. Erichthonius was in turn followed by his son Tros, from whence we receive the customary names for the city and the people. Tros was in turn followed by his son Ilus. Following a cow for guidance, Ilus actually founded the city of Troy. Ilus' son Laomedon succeeded him. Laomedon was responsible for the building of Troy's massive walls, as well as for the first fall of Troy at the hands of Heracles. Laomedon was killed, and his pious son Priam was placed upon the throne. Priam was the king of Troy at the time of the Trojan War.
Oxford Concise Companion to Classical Literature. ed. Howatson and Chilvers. Oxford. New York, 1993.