The term: Short for independent rock. In terms of music it would be independent of major labels/mainstream stuff.
History: grew out from 60s garage, 70s punk, and 80s post punk it started in the mid 80s as alternative/college radio music. Once nirvana hit big the alternative genre split: the popular side was just alternative(Smashing Pumpkins, Hole, No Doubt, etc.) and the other half that wasn't mainstream(by choice or not) became indie rock(Pavement, Sebadoh, Built To Spill, etc).
Some bands have signed to major labels but are still considered indie(Modest Mouse, etc.). Go figure.
Sound: In the begining indie sounded like alternative(because it was) but it grew more experimental and weird. In Britain indie has more of a typical sound like Radiohead, Muse, etc. rather than a definition based on 'the scene.'
The scene: if you really think all indie kids do is try to be cooler than other people then... well.. you're mostly right. The main point is, don't take the scene and the whole hipster attitude seriously. No one does. And if you do, well, then I'm cooler than you.
just gimme indie rock
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