Although the extragalactic nature of quasars was discussed as early as 1960, it was rejected largely because of preconceived ideas about what appeared to be an unrealistically high luminosity. Following the 1962 occultations of the strong radio source 3C 273 at Parkes, and the subsequent identification with an apparent stellar object, Maartin Schmidt recognized that the relatively simple hydrogen line Balmer series spectrum implied an unambiguous redshift of 0.16 leading to the general, although not universal, acceptance of quasars as being extragalactic and the then most luminous objects in the Universe. Successive radio and optical measurements quickly led to the identification of other quasars with increasingly large redshifts. However, claims for a more local population continued for at least several decades confused perhaps by the recognition of the much larger class of radio quiet quasars and active galactic nuclei (AGN), and the uncertain connection with Seyfert galaxies and Zwicky's compact galaxies.
Curiously, 3C 273, which is one of the strongest extragalactic sources in the sky, was first catalogued in 1959 and the mag 13 optical counterpart was known at least as early as 1887. Although, since 1960, much fainter optical counterparts were being routinely identified using accurate radio interferometer positions, 3C273 eluded identification until the series of lunar occultations by Cyril Hazard and others were used to determine the position and morphology of the radio source. Subsequent attempts to classify quasars into numerous sub-categories based on their observed optical, radio, IR and high energy properties have perhaps led to more confusion than clarity.