how do you counter? Does it happen automatically?

And what is the history section for during combat? It always seems to be empty for me...

You counter by holding down the L2 button and hitting either O,X, or Square when someone attack you. The History will appear once you unlock the ability to counter. Get further in the game and you'll just find out it's there so you can see previous buttons by the opponent, sometimes theres a pattern, other times, not. It's all random.