The first European to visit what is now Chile was Portuguese explorer Ferdinand Magellan, who landed at Chiloé Island following his voyage, in 1520, through the strait that now bears his name. The region was then known to its native population as Tchili, a Native American word meaning “snow.” At the time of Magellan’s visit, most of Chile south of the Rapel River was dominated by the Araucanians, a Native American people remarkable for its fighting ability. The Native Americans occupying the northern portions of Chile had been subjugated during the 15th century by the Incas of Peru.
In 1535, after the Spanish under Francisco Pizarro had completed their conquest of Peru, Diego de Almagro, one of Pizarro’s aides, led a gold-hunting expedition from that country overland into Chile. The expedition spent nearly three fruitless years in the country and then withdrew to Peru.
Pedro de Valdivia, another of Pizarro’s officers, led a second expedition into southern Chile in 1540. Despite fierce resistance from the Araucanians, Valdivia succeeded in establishing several settlements, including Santiago in 1541, Concepción in 1550, and Valdivia in 1552. In 1553, however, the Araucanians organized a successful uprising, killing Valdivia and many of his followers and devastating all the towns except Concepción and La Serena. The rebellion was the initial phase of warfare that lasted nearly 100 years. Hostile to colonization, the Araucanians were the only important Native American people who were never entirely subdued by the Spaniards.
Not until the last quarter of the 19th century did the Chileans succeed in pushing them into the forests of the south and bringing them under government control. The fierce and persistent resistance of the Araucanians gave a frontier flavor to the history of Chile for several centuries. In spite of their bitter fight against the Araucanians, the Spanish came to admire them and to mix with them, so that a majority of Chileans today probably have Araucanian ancestors.
In the Spanish colonial organization Chile originally was a dependency of the Viceroyalty of Peru and later had its own government. The country developed slowly because there was not enough silver or gold to attract the Spanish. Moreover, it was far from the main centers of Spanish colonization in Peru and was difficult to reach. Most of those who did settle in Chile became farmers, and Chile supplied Peru with foodstuffs, especially wheat. Orchards, ranches, and vineyards also prospered. The townspeople lived by trade. Encarta "Chile" © Emmanuel BUCHOT, Encarta, Wikipedia
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