The first Spaniard seeking fortune in the region was Diego de Almagro, who worked with Francisco Pizarro. He arrived in 1537, but saw no immediate signs of wealth so moved back north to the Incan Empire based in modern day Peru. Next came Pedro de Valdivia, who founded the city of Santiago de Chile (commonly referred to as just Santiago) in 1541. European settlement was slow to develop in Chile, partially because of the mountainous landscape, partially due to the lack of gold and silver, and partially due to the fierce resistance of the local people.
The Mapuche people (one of the Araucanian groups) weren't completely defeated by the Spanish until the 1880s. In fact, they were so successful in fighting the Spanish, the latter finally gave up southward expansion in 1598 as their influence only reached to the Bio-Bio River. North of this line Spanish influence slowly took over the region and the people and south of it was left to the Mapuche. Through the 1600s and into the 1800s, Chile developed in these two areas: the north was heavily Spanish as most of the indigenous people were killed, enslaved, or fled to the mountains, while in the south the people lived much as they had for centuries, but with horses and European weaponry.
From the time the Spanish ended their southward expansion in 1612 the two sides came to some agreements, but for the most part the regions left each other alone. The greatest change from these talks was the introduction of missionaries. Missionaries spread rapidly through the Spanish-controlled region and missionaries were allowed into the southern, Mapuche-controlled lands, although their acceptance and safety shifted over time and from region to region. None-the-less, they had some success in converting the people to Catholicism.
In the early 1800s France took over Spain and soon after the Spanish colonies in the Americas began to crumble. Chile, like most countries, was divided on their future as some people sought independence and others wanted to remain with Spain. The division eventually boiled over as civil war broke out in 1810.
The war quickly shifted in favor of the independence seekers, but they were divided as to who should govern after the war, creating further fighting and Spanish takeover in 1814. After a couple years or tumultuous Spanish rule, the independence seekers fought back in 1817-1818 to re-take the lands with the help of Argentine Jose de San Martin.
After independence, Chile reverted back to their previous state as they struggled to find direction and an identity. The people were divided on numerous issues, including the role of the Catholic Church, land reform, and the economic state among many others. This led to political instability and vast changes done quickly before other groups could fight the move. One of these changes was the ending of slavery, which was done in 1823; this action was well received by some, but fought by most land owners.
In the 1830s the economy was put back on track. Stability also contributed to Chile's successes at this time, which included a victory over Peru-Bolivia in a war that gave Chile more land and coastline in the north in 1836-1839. Also during this time the country modernized as infrastructure was built, including railways and ports, and communication also expanded greatly.
During this decade the people began to form a more independent identity and direction as a nation. They united as one nation more than they were divided and their military strength in defeating Peru-Bolivia provided a great moral boast as well as confidence. However, in the south the indigenous people, including the Mapuche, continued to fight the Chileans, or hide from them. During this time they continued to maintain many aspects of their historic culture despite the strengthening Chilean government and military.
Since the country was improving on most accounts at this time, the government created a new constitution in 1833, which heavily centralized power in the hands of the president, something few people objected to at the time since the country was quite stable. Additionally, Chile didn't extend rights to many people as only the wealthy could vote and only they had any true power as the president often listened to them and sided with their interests, creating little conflict for great stretches of time.
The late 1800s saw more violence and greater expansion of land by Chile. The country again went to war with Peru-Bolivia in 1879 as Chile again won more territory along the Pacific Ocean. Then in 1881 Chile signed a treaty with Argentina exchanging lands between the two countries. This gave Chile the Strait of Magellan, but Argentina gained much of Patagonia. Also during this time the ethnic Spanish made great strides in taking control of the Mapuche-controlled lands in southern Chile.
After a brief attempt to establish a dictatorship in the 1880s, in 1891 the governmental system changed as some powers were taken from the presidency. This new system gave the people greater representation and the elected officials more powers, at the expense of the president. The system struggled to find success, but all parties were represented and peace was established.
By the 1920s, as more Chileans gained political power, social issues came to the forefront of politics as the people demanded greater rights in and out of the workplace. With vast changes on the horizon, instability again arose as conflicting sides protested the proposed changes and eventually a couple military coups took over the government in the mid-1920s.
One of the many governments that came to power during this time fell under the leadership of General Carlos Ibanez, who was a German national and strongly allied with Germany in the inter-war period. However, he broke with Germany when Adolf Hitler took power and shortly after Chile parted ways with Ibanez as the country again fell into chaos, which continued into the 1960s.
Despite the political scene settling down in the 1960s, communication and progress were still slow to move forward. This continued into the 1970s as the socialist party came to power, collectivizing many institutions, redistributing land, and causing numerous economic embargos, most notably from the United States. This new system soon failed economically as the black market arose in order to provide people with jobs, as well as a means to obtain goods that were no longer available (or were too expensive) on the legal market. The failing economy led to increased tensions among the socialists and their many opposition groups and the quick overthrow of the party and government.
A military coup overthrew the socialists in 1973 when General Augusto Pinochet Ugarte took over. Pinochet killed numerous socialists and suppressed many rights when he took office in order to prevent revolt or rebellion, then he focused on the economy. Free trade and an open market were established as trade relations with numerous countries were again opened. The introduced changes took years to take hold, but they eventually did.
The stronghold of Pinochet ended in 1990 with a general election. Little changed in the economic sphere from this point on as free trade agreements have been signed with numerous countries. However, social freedoms have since expanded while investigations into past human rights violations are being explored.