Just why were they created? The reason is tied to the regret the Elves had for the passage of time. The Elves were immortal and were fated to live as long as Middle-earth lasted. As such, the earth changed with the passage of time, and the Elves saw many things that were fair become destroyed and lost by the hurts of evil. Sauron, as tempter, awoke a desire in the hearts of Elves to heal the hurts of the earth and create a paradise on this side of the sea to compare to Valinor -- and to be its rulers; whereas in Valinor they were only subjects and below the Valar. The Rings of Power were primarily made to slow the passage of time and preserve their creations of beauty. Yet they had other powers as well.
Tolkien provides a revealing insight on to the nature of the Rings and their powers in one of his letters:
"The chief power (of all the rings alike) was the prevention or slowing of decay (i.e. 'change' viewed as a regrettable thing), the preservation of what is desired or loved, or its semblance --- this is more or less an Elvish motive. But also they enhanced the natural powers of a possessor -- thus approaching 'magic', a motive easily corruptible into evil, a lust for domination. And finally they had other powers, more directly derived from Sauron... such as rendering invisible the material body, and making things of the invisible world visible."
The Letters of J.R.R. Tolkien #131