Why do schools have 'houses'

All girls in my school were divided into four houses, which cut across the different year groups. Ours were named after British naval captains - Drake, Raleigh, Rodney, Hood - and we had badges and colours. You got awarded house marks for good performance in school work and sports. You could also lose them. At the end of the year the house group with the most points got some privilege such as wearing non-uniform clothes in class, or going on a trip.