This Surah was revealed during the earliest period at Makkah when detailed verses of the Qur'an dealing with the essence and attributes of Allah Almighty had not yet been revealed, and the people, hearing the Prophet's invitation to Allah, wanted to know what his God, whose worship and service he was calling them to, was like.
The unique attributes of Allah.
It is important to know what the religious concepts of the world were at the time the Prophet began to preach the message of Tawhid. The idolatrous polytheists were worshipping gods made of wood, stone, gold, silver and other substances. These gods had forms, shapes and bodies and the gods and goddesses were descended from each other. No goddess was without a husband and no god without a wife. They stood in need of food and drink and their devotees arranged these for them. A large number of the polytheists believed that God assumed human form and there were some people who descended from Him. Although the Christians claimed to believe in One God, they also believed that their God had at least a son, and that the Father, Son and the Ghost also had the honor of being associated with their Godhead to such an extent that God had a mother and a mother-in-law as well. The Jews also claimed to believe in One God, but their God too was not without physical, material or other human qualities and characteristics. He went for a stroll, appeared in human form, wrestled with a servant of His, and was father of a son, Ezra. In addition to these religious communities, the Zoroastrians - fire worshippers and the Sabians - star worshippers, also existed. Under such conditions when the people were invited to believe in Allah, the One, Who has no associate, it was inevitable that questions arose in their minds as to what kind of God He was, Who was the One and Only and Whose invitation to believe in Him was being given at the expense of all other gods and deities. It is a miracle of the Qur'an, that in a few brief words it answered all questions and presented such a clear concept of the Being of Allah that all polytheistic concepts were destroyed, leaving no room for the ascription of human qualities to His Being.
That is why the Prophet (pbuh) held this Surah in such great esteem. This made the Muslims realize its importance in different ways and exhorted them to recite it frequently and disseminate it among the people. It states the foremost and fundamental doctrine of Islam (Tawhid) in four brief sentences, impresses on human memory and can be read and recited easily. There are a great number of Hadith which show that the Prophet, on different occasions and in different ways, told the people that this Surah is equivalent to one third of the Qur'an. Several ahadith on this subject have been related in Bukhari, Muslim, Abu Daud, Nasai, Tirmidhi, Ibn Majah, Musnad Ahmed, Tabarani and other books. Commentators have also given many explanations of the Prophet's saying. In Abul A'la Maududi's opinion it simply means that the religion presented by the Qur'an is based on three doctrines: Tawhid, Risalat and the Hereafter. This Surah teaches Tawhid, pure and undefiled. Therefore, the Prophet (pbuh) regarded it as equal to one-third of the Qur'an.