I had no idea myself until just recently. The 99% Invisible podcast had a decent episode about it which I listened to that helped put it all into context.

The short story is that it was a labor movement trying to prevent mill owners from abusing workers by using automation to bleed the maximum productivity out of the fewest people. The Luddites would break into mills and smash the “infringing” machines. Tensions rose, the Luddites were eventually crushed, and the term Luddite was intentionally rebranded by capitalists to be synonymous with ignorant/anti-intellectual so that no one would ever want to associate with them again.