It's a very moving piece and was played at my Dad's funeral. But the origins of the song are not as dramatic, but the song is no less beautiful...

From the History Channel...

The true history of Taps is much less romantic, but there was one kernel of truth in the Captain Elliscombe story. Taps was, in fact, written at Harrison's Landing, after the Seven Days Battles, in 1862.

...but as we already know, it did not originate as a piece of funeral music. It originated as a call for lights out...
At that time, the call for lights out was a French tune called Extinguish Lights, but Union General Daniel Butterfield (left) felt this was too formal. Instead, he wanted a more soothing call to tell his men that the day was over, so he turned to an old, unused tune called Scott's Tattoo.
The term tattoo was derived from an old Dutch military word which meant it was time to turn off the beer taps and return to camp. Tattoo was usually played about an hour before lights out, to give soldiers time to prepare to end the day.
Scott's Tattoo had been replaced by a newer tattoo in the Union Army, and Butterfield felt it was a good starting place for his new call to lights out. He called for his brigade's bugler, Oliver Wilcox Norton, and the two worked together to write Taps. Here is Norton's account of how that meeting went:
"One day, soon after the seven days’ battles on the Peninsular, when the Army of the Potomac was lying in camp at Harrison’s Landing, General Daniel Butterfield sent for me, and showing me some notes on a staff written in pencil on the back of an envelope, asked me to sound them on my bugle. I did this several times, playing the music as written. He changed it somewhat, lengthening some notes and shortening others, but retaining the melody as he first gave it to me. After getting it to his satisfaction, he directed me to sound that call for “Taps” thereafter in place of the regulation call. The music was beautiful on that still summer night and was heard far beyond the limits of our Brigade. The next day I was visited by several buglers from neighboring brigades, asking for copies of the music which I gladly furnished. I think no general order was issued from army headquarters authorizing the substitution of this for the regulation call, but as each brigade commander exercised his own discretion in such minor matters, the call was gradually taken up through the Army of the Potomac."
As Norton suggested, Taps spread quickly within the Army of the Potomac, and soon saw widespread use as the call to lights out. Within a few months, it had become common to use Taps during funeral services (thanks to Captain Tidball).
The tune also quickly gained widespread use for lights out in the Confederate Armies, and roughly ten months after Butterfield and Norton put the finishing touches on Taps, it was played at the funeral service of Confederate General Stonewall Jackson.