The Playfair cipher, invented by Charles Wheatstone in 1854, improves encryption security by treating pairs of letters (digrams) in plaintext as single units, using a 5x5 key matrix. This method complicates frequency analysis due to the increased number of digrams compared to single letters, significantly enhancing security over monoalphabetic ciphers. However, despite its historical use by military forces, the Playfair cipher can still be broken with enough ciphertext as it retains some structure of the original language.