When and where did the Catholic tradition of first communion at 7 years old start?

Catholicism doesn't currently set a specific age at which First Communion is taken. The New Advent article on Communion of Children says this (Emphasis mine):

The existing legislation with regard to the Communion of children has been definitely settled by the Fourth Lateran Council, which was afterwards confirmed by the authority of the Council of Trent. According to its provisions children may not be admitted to the Blessed Eucharist until they have attained to years of discretion, but when this period is reached then they are bound to receive this sacrament. When may they be said to have attained the age of discretion? In the best-supported view of theologians this phrase means, not the attainment of a definite number of years, but rather the arrival at a certain stage in mental development, when children become able to discern the Eucharistic from ordinary bread, to realize in some measure the dignity and excellence of the Sacrament of the Altar, to believe in the Real Presence, and adore Christ under the sacramental veils. De Lugo (De Euch., disp. xiii, n. 36, Ben. XIV, De Syn., vii) says that if children are observed to assist at Mass with devotion and attention it is a sign that they are come to this discretion.

The source of this is a decree, issued in 1910, named Quam Singulari addressed baptism of children. Included in the section of the linked article titled "Conditions for first confession and first communion"

Before we get into what the new Advent article states, it appears that some Priests mistakenly believe that the Quam Singulari Decree gives seven as an exact age. Example here.

• The age of discretion, which applies equally to both sacraments. This may be judged (1) by the first indication of the child using its reasoning powers; (2) by the child knowing what is right from wrong. No determined age is placed as a condition; the age of seven is mentioned because the majority of children arrive at the years of discretion, that is, begin to reason, about this period, some sooner, some later.
• A knowledge such as a child just beginning to reason can have about one God, Who rewards the good and punishes the wicked, and about the mysteries of the Trinity and the Incarnation. It is not necessary that the child should commit to memory accurate theological definitions, which may convey no idea to the little mind just beginning to unfold.
• A child must be able to distinguish the Eucharistic from the common bread; that is, to know that what looks like bread is not bread, but contains the real, living Body and Blood of Christ.
• Children should be taught to receive Holy Communion devoutly.
• Children should be instructed on the necessity of being in the state of grace and of having a good intention, also of fasting from midnight before Communion.

The actual text of the Quam Singulari Decree can be found here. The section in which seven year-olds are mentioned reads as follows (emphasis mine):

The principal interpreters of the Lateran Council and contemporaries of that period had the same teaching concerning this Decree. The history of the Church reveals that a number of synods and episcopal decrees beginning with the twelfth century, shortly after the Lateran Council, admitted children of seven years of age to First Communion. There is moreover the word of St. Thomas Aquinas, who is an authority of the highest order, which reads: "When children begin to have some use of reason, so that they can conceive a devotion toward this Sacrament (the Eucharist), then this Sacrament can be given to them."6 Ledesma thus explains these words: "I say, in accord with common opinion, that the Eucharist is to be given to all who have the use of reason, and just as soon as they attain the use of reason, even though at the time the child may have only a confused notion of what he is doing." Vasquez comments on the same words of St. Thomas as follows: "When a child has once arrived at the use of reason he is immediately bound by the divine law from which not even the Church can dispense him."

Using the above, we could say that the tradition started out in the twelfth century with some synods and decrees, which were later corrected by the Quam Singulari Decree.

That answers when it starts, but if seven is no longer a proscribed age, why is it so common now?

The closest answer I could find was this article from holyfirstcommunion.com .

You may be wondering, "what is the proper First Communion age"?.
Well, I hesitate to put an exact age here. Requirements can literally vary from church to church.

A general answer is that the children are usually age 7 or 8. Some churches say at least second grade. Some churches say after one year of formal religious education. And I found one website that said they had no requirements as it is about God's grace and they were no longer going to base receiving First Communion on merit! So, when you are looking to find out the right First Communion age for your child, contact your specific church for their requirements.

Based on this, it appears that the age of seven is a common age, but not one that is dictated.

Admittedly, this next is at best, an educated guess, but it seems to me that, for the sake of convenience, a Church, or a diocese would settle on a simple, easy to remember common age that would serve as a "rule of thumb". When a child reaches this age or school grade level, he or she is likely to have reached the age of accountability. This would make it much simpler to organize classes in the Church to provide the necessary training, education, and preparation in a group/class setting.

Going beyond this, it is relatively clear, simply from some Google searches that seven is a very common age, even if it's not a dictated age, set in stone. E-How.com has a gift guide specific to giving a seven year old boy a meaningful First communion gift,