Who defined semantic security? In my opinion the most important development in cryptography in the last 30 years is the precise definition of semantic security of a cipher. This definition captures the intuitive ideas of Martin Hellman, Ralph Merkle, and Whitfield Diffie of the mid-1970's tying cryptography to complexity theory that gave rise to the new cryptography with all its beautiful applications, multiple use of a key for file encryption, digital signatures, digital payment systems, one-way functions, one-way trapdoor functions, collision-resistant hashing, message digest codes, and so on.

My question is who came up with the precise definition of semantic security? Can you provide the reference to the paper that first defined semantic security precisely?
The source is the paper by Goldwasser and Micali on probabilistic encryption. The definition is of primary importance even though it is rarely used to prove security of encryption. The reason for this is that indistinguishability is much easier to use. However, indistinguishability is not a good intuitive definition in the sense that it is not immediately clear that it means that nothing can be learned about a plaintext from the ciphertext (beyond the length and any existing a priori knowledge). Since this latter notion is what we want to formalize, and this is exactly what is formalized in the definition of semantic security, this is the definition of encryption. Of course, by its equivalence to indistinguishability we can happily use the simpler definition, with the knowledge that nothing is revealed beyond what is already known (and the length).