The real answer to why was 120v chosen was economics (money). Originally electricity was delivered to homes, and most businesses, for a single purpose and that was lighting (can openers, TV's and other such things came later). At the time the most cost effective form of light bulb was a carbon filament bulb that operated "best" at 100v to 110v, this when figured with transmission voltage drop set most supply lines at 120v. By the time cost effective metal filament bulbs, working at higher voltages, were brought to the market most of the cities (In the USA) were already running 120v supply lines. Europe was just starting such systems and opted for higher voltage supply lines.
Higher voltages are used for long-distance transmission and power distribution because more power can be transferred over the same size wire at a higher voltage (lower current). Power generation plants often use voltages in the hundreds of thousands, 115,000 to 165,000 volts to move power over long distances. For lines of up to 20 miles long around a city, 2400 volts works well to reduce the voltage loss in the wires.
In the United States, the electricity utility powerlines going to residential streets and roads are operated from 2300 to 2400 volts. With a 2400 volt supply, it is very convenient and easy to design and build pole transformers that have a 10-to-1 step-down ratio, thus providing 240 volts to the houses. The transformers also have a center tap to provide 120 volts from each 240-volt leg to the center point. This center point tap also provides a convenient point for a grounding connection. The actual measured voltage in your house receptacle circuits will normally be 120 to 125 volts. All appliances are rated for the minimum operating voltage (110-115), thus there is much confusion about the actual level of the supply voltages.
Different voltage levels are used in different countries around the world. The reason to use higher voltage is that it is more economical. The current is less, so the wires can be smaller. On the other hand, the reason to use lower voltage in homes is safety: the lower the voltage, the safer it is.
Well, in a way we do use 240. If you have 10 amps drawing on one leg of your 240/120 service, and 10 amps on the other leg, the I2R (Eye Squared Are is how that is pronounced) losses are one fourth what they would be if you had 20 amps on just the one leg. But I think that the Europeans use 480/240, so their I2R losses are 1/16th of our 120 volt losses (if you had the 20 amps on just one leg.)
Why not use 120?? We could use 220 or so like the Europeans only their alternating mains frequency (cycles per second) is 50Hz not 60Hz like ours. You could think 240 volts is too much in your house for simple stuff as you would get a worse beating/shock if you were working on stuff on your own. There are a whole ton of complicated other reasons having to do with transformers and transmission lines and the math involved. I recommend a book from Barnes and Nobles and a Hazelnut latte !!
The original voltage was actually about 90 volts direct current (VDC) which was Edison's plan. Tesla proposed that the electrical grid be alternating current (AC) and competed with Edison for the first generating plant to be built in the State of New York at Niagara Falls. Edison proposed a DC system and Tesla an AC system. As history tells us Tesla won the competition and because of that we had the industrial revolution. Had Edison won we would still be in the dark ages because of the inefficiency of transmitting DC over long distances. As Edison was promoting the electrical light bulb around the country almost every town had to have its own generating station because DC would lose so much in the transmission that it became unusable after only several miles.
Tesla also had invented the poly phase alternating current generators that provided for the ability to generate the voltages necessary for long distance transmission. Tesla kept the voltage about the same as what Edison started but raised it to the 110 volts alternating current (VAC) because of the higher related voltages of 220 VAC and 440 VAC which were integral to the poly phase generators of higher efficiency.
The standard voltage available in most parts of the country now varies from 110 VAC to 120 VAC+ volts usually around 117-118 VAC.
Common distribution voltage run up to 16000 volts. 12000 is very common but there is still a lot of activity adding on to legacy distribution grids at lower voltage. A 2400 volt primary is very low for a distribution transformer
In actuality power transmission is not 20 miles and the voltage is more then 110kV. In fact interstate transmission is in the range of close to 500kV. At a substation it is reduced to 16kV for local area distribution. Transmission for the whole of the grid in the USA is all tied together . Why? For economy and reliability. For example in the Summer some states do not use air conditioning but in Las Vegas CA they do, so they actually buy the power from those northern states in the Summer because it is cost effective and ensures there can be less generation plants. Even then reserve spin power must be sustained for peak demands. Because power plants cannot produce almost instant acceleration to meet new demands, like car engines can do, in many cities and other peak demand areas, specialist "peakers" work to ensure that the the integrity of the grid is always maintained. 240 v is standard for the USA but only one phase is used and the transformer center tap is earthed to ground making it safer. The 60 cycles per second produced by power generation is not as stable as some people think: it sometimes has to vary throughout the day as loading changes but averages 60Hz over a complete day.