To some extent a compromise between solar time and political and economic realities. For example, the Eastern Time Zone in the USA stretches almost to 90 degrees West, reflecting the East Coast's powerful pull on that part of the country.
Way back when, the drive in people won out.
Indiana's Daylight Time mistakes were fascinating. It wasn't that the state didn't adopt it, it was that originally the state allowed it to be a per-county decision as timezones have always been in Indiana. At one point in time if you were traveling I-65 which is nearly due north/south between Louisville and Indianapolis you could experience four different timezones (CST, EST, CDT, and EDT) and which ones agreed with each other obviously depended on which month you were traveling. Since Indiana went state-wide Daylight Time and Indianapolis decided on EDT once and for all, all of I-65 today is EDT I believe, but it is still strange to remember the years where that wasn't the case.
(ETA: one of the underappreciated homogenizing factors here has been the modern cellphone. People would get really confused if their cellphones hopped an hour back/forth every so many miles as you passed county lines. In the eras of paper maps and hand-set clock radios in cars that would have mattered a lot less.)