Rumours go that the position was invented by Luciano.Luciano, in an attempt to establish peace within the organization,knew most trouble started with underlings trying to get ahead.He ordered each crime family to establish the a consigliere,a neutral middleman who would settle disputes within the family and act as a negotiator with the other families in disputes such as over territories.The consigliere would act as a hearing officer,one who would have to clear any plan to knock off a Mafia member.He could also forbid a hit if necessary.This was to give the lower rank members a sense of protection from the unjust acts of a family boss or any of his capos.A consigliere will not go against the edicts of a boss or other superior.To do so would be a death wish for the consigliere. Even in those cases when a consigliere is allowed to rule on a matter with no interference from above, his decision may end up ignored.
As Hairy said its more glamorous in books and movies, the consigliere job is most likely a dead end job.