XSD has advantages over earlier XML schema languages, such as DTD. Because XSD is written in XML, there is no need for a parser. XSD defines a richer set of data types such as booleans, numbers, dates and times, and currencies -- which is invaluable for e-commerce applications. DTDs, on the other hand, express data types as explicit enumerations, which makes validation much more difficult and less accurate.
More important, XSD makes it easier to validate documents based on namespaces (used to qualify element and attributes names by associating them with namespaces identified by URI references. Namespaces prevent identically custom-named tags that may be used in different XML documents from being read the same way), something DTDs cannot do.
XSD is defined in the W3C's XML Schema Working Group Working Draft published on May 6, 1999.