Versioning
Versioning of content is an Enterprise Edition feature. In principle Magnolia CMS allows you to create a new version every time you change content. However, this would use significant amounts of physical memory and is not recommended. Instead, the system versions content only on activation.
Command chain
Versions are created when the versions command is triggered. This command is included in the:
activatecommand chain in thewebsite,dmsanddataworkspaces.deactivatecommand chain in thewebsiteworkspace.

You will find similar configurations at:
modules/dms/commands/dms/activate/version.modules.data/commands/data/activate/version.
Version configuration
The number of versions stored is configured in /modules/server/version.

By default the maximum number of versions kept is set to 10. To change this value sign in as a user with access to configuration and set the maxVersionIndex property to the desired value.
Previous versions created before setting new maximum version index will not be affected until a new version is created. For example, if node ‘A' has 10 versions and you change the max version index to 2, you will still see all 10 versions until the next versioning occurs. Once node 'A' is versioned again, all previous 9 versions will be removed.
Usage
Working with versions is covered in Actions > Versioning.