UTAU has its origin in "Jinriki Vocaloid" (人力ボーカロイド, translated as "Manual Vocaloid"). It is a re-edit of existing singing voices, extracting tones as .wav files and reassembling them. For this purpose, a support program was created. In March 2008, "Ameya/Ayame" (飴屋／菖蒲) released a free, advanced support tool as UTAU.
It was said that this program was developed as an answer to the very-expensive VOCALOID software.
Initially, the program came with only a sample voicebank, then only known as "Default". It gained popularity parallel to what VOCALOID had with Miku, with Teto's arrival to the UTAU scene. From there, many voicebanks were created.
Initially, UTAU was subpar to VOCALOID in terms of singing quality, but the author began developing the capabilities to the program until it became a viable substitute.
(from UTAU wiki)
For short, UTAUloid is free version of VOCALOID itself.
And you also can make your own UTAU Voice Bank.