Hippocampi is the plural form of hippocampus, which comes from the Greek hippos meaning "horse" and kampos meaning "sea monster." They first came into Greek mythology around the 16th century or earlier. Some people believed that sea-horses were the baby version of the hippocampus; they'd start out small and then develop legs and a fin as they grew.
Created by Poseidon, the Greek god of the sea, earthquakes, and horses, the hippocampi were commonly depicted as pulling his chariot through the water. They lived in the seas, but were also able to survive in fresh water.