A coordination compound is first distinguished from a double salt by a solution test: a double salt (like Mohr's salt, FeSO₄.(NH₄)₂SO₄.6H₂O) dissociates completely into its simple constituent ions in water, while a coordination compound's complex ion (like [Fe(SCN)₆]³⁻ in potassium ferrithiocyanate) keeps its identity and does not break apart into simple ions.
Alfred Werner (1866-1919) proposed the first successful theory explaining coordination compounds in 1893, before the electron itself had even been discovered, purely from reaction-chemistry observations -- work that won him the 1913 Nobel Prize in Chemistry as the first inorganic chemist to receive it. His puzzle was the cobalt(III) chloride-ammonia system: CoCl₃.6NH₃, CoCl₃.5NH₃, and the cis/trans forms of CoCl₃.4NH₃ are four distinctly coloured compounds that precipitate different numbers of moles of AgCl per mole of complex, even though the ordinary valences of both starting materials are already fully satisfied.
Werner's five postulates: (1) elements show two kinds of valence -- primary valence (the modern oxidation state) and secondary valence (the modern coordination number) -- and satisfy both. (2) Primary valence is usually positive and is satisfied by negative ions. (3) Secondary valence is satisfied by negative ions, neutral molecules, positive ions, or a mixture. (4) There are two spheres around the metal: an inner coordination sphere (firmly bound groups) and an outer ionisation sphere (loosely bound, ionisable groups). (5) Primary valences are non-directional but secondary valences ARE directional, and their spatial arrangement fixes the complex's geometry -- coordination number 6 gives octahedral, coordination number 4 gives tetrahedral or square planar.
Werner's theory explains ionisability, geometry, and the AgCl-precipitation pattern extremely well, but it has one major gap: it cannot explain why coordination compounds are coloured or what governs their magnetic properties -- the two properties that Valence Bond Theory and, more successfully, Crystal Field Theory were developed to address.