The tensor product of chain complexes (of $R$ modules) $C_\bullet ,D_\bullet$ is defined as $$(C_\bullet \otimes D_\bullet )_n = \bigoplus_{i+j=n} C_i \otimes_R D_{j}$$
I understand this definition works by yielding a chain complex (with a nilpotent boundary operator as usually defined), but I don't understand anything about it beyond that.
Questions:
- What is the motivation behind this definition?
- Is there any geometric insight to be gained here?
- Where can I read about its history?
Added: Does the tensor product of chain complexes as defined above posses some universal property (which is easy to formulate) in $\mathsf {Ch}_\bullet$?

Let $(C,d_C)$ and $(D, d_D)$ be two chain complexes of $R$-modules, where $d_C$ and $d_D$ are differentials of degree $+1$. By definition, each $C_i$ and $D_j$ are $R$-modules. We want to "compose" the above complexes in a tensorial way; the definition you propose has 2 main effects:
is compatible with the (co)homological grading. In fact, for all $c\in C_i$ and $g\in D_j$, s.t. $i+j = n$, i.e. $c\otimes_R g\in (C\otimes_R D)_{n}$ then
$$d_{C\otimes_R D}(c\otimes_R g)= d_C c\otimes_R g + (-1)^i c \otimes_R d_Dg\in (C\otimes_R D)_{n+1}, $$
as $d_C c\in C_{i+1}$ and $d_D g\in D_{j+1}$. We used the Koszul sign rule.
For topological / geometric insights I refer to the text "Rational Homotopy Theory" by Felix, Halperin and Thomas. For formal definitions and applications in homological algebra the book by Gelfand and Manin is recommended, instead.