There are various theories about the origin of the word Chile. According to a theory by 17th century Spanish chronicler Diego de Rosales, the Incas of Peru called the valley of the Aconcagua "Chili" by corruption of the name of a Picunche tribal chief ("cacique") called Tili, who ruled the area at the time of the Incan conquest in the 15th century. Another theory points to the similarity of the valley of the Aconcagua with that of the Casma Valley in Peru, where there was a town and valley named Chili.
Other theories say Chile may derive its name from the native Mapuche word chilli, which may mean "where the land ends," "the deepest point of the Earth," or "sea gulls;" or from the Quechua chin, "cold", or the Aymara tchili, meaning "snow". Another origin attributed to chilli is the onomatopoeic cheele-cheele—the Mapuche imitation of the warble of a bird locally known as trile, before common in the central valleys. The Spanish conquistadors heard about this name from the Incas, and the few survivors of Diego de Almagro's first Spanish expedition south from Peru in 1535-36 called themselves the "men of Chilli." Ultimately, Almagro is credited with the universalization of the name Chile, after naming the Mapocho valley as such.
About 10,000 years ago, migrating Native Americans settled in fertile valleys and coastal areas of what is present-day Chile. Example settlement sites from the very early human habitation are Monte Verde, Cueva del Milodon and the Pali Aike Crater's lava tube. The Incas briefly extended their empire into what is now northern Chile, but the Mapuche (or Araucanians as they were known by the Spaniards) successfully resisted many attempts by the Inca Empire to subjugate them, despite their lack of state organization. They fought against the Sapa Inca Tupac Yupanqui and his army. The result of the bloody three-day confrontation known as the Battle of the Maule was that the Inca conquest of the territories of Chile ended at the Maule river.
In 1520, while attempting to circumnavigate the earth, Ferdinand Magellan discovered the southern passage now named after him, the Strait of Magellan. The next Europeans to reach Chile were Diego de Almagro and his band of Spanish conquistadors, who came from Peru in 1535 seeking gold. The Spanish encountered various cultures that supported themselves principally through slash-and-burn agriculture and hunting. The conquest of Chile began in earnest in 1540 and was carried out by Pedro de Valdivia, one of Francisco Pizarro's lieutenants, who founded the city of Santiago on February 12, 1541. Although the Spanish did not find the extensive gold and silver they sought, they recognized the agricultural potential of Chile's central valley, and Chile became part of the Spanish Empire.
Conquest of the land took place gradually, and the Europeans suffered repeated setbacks at the hands of the local population. A massive Mapuche insurrection that began in 1553 resulted in Valdivia's death and the destruction of many of the colony's principal settlements. Subsequent major insurrections took place in 1598 and in 1655. Each time the Mapuche and other native groups revolted, the southern border of the colony was driven northward. The abolition of slavery by the Spanish crown in 1683 was done in recognition that enslaving the Mapuche intensified resistance rather than cowing them into submission. Despite the royal prohibitions relations remained strained from continual colonialist interference.
Cut off to the north by desert, to the south by the Mapuche, to the east by the Andes Mountains, and to the west by the ocean, Chile became one of the most centralized, homogeneous colonies in Spanish America. Serving as a sort of frontier garrison, the colony found itself with the mission of forestalling encroachment by both the Mapuche and Spain's European enemies, especially the British and the Dutch. In addition to the Mapuche, buccaneers and English adventurers menaced the colony, as was shown by Sir Francis Drake's 1578 raid on Valparaíso, the colony's principal port. Because Chile hosted one of the largest standing armies in the Americas, it was one of the most militarized of the Spanish possessions, as well as a drain on the treasury of the Viceroyalty of Peru. By the end of the colonial period, the population reached an estimated 500,000 (not including unsubjugated Indians); approximately 300,000 of which were mestizos and about 150,000 of which were Criollos (European or European descent).
The first general census was performed by the government of Agustín de Jáuregui between 1777 and 1778. The census indicated that the population consisted of 259,646 inhabitants: 73.5% of European descent, 7.9% mestizos, 8.6% Indians and 9.8% blacks. In 1784, Francisco Hurtado, Governor of the province of Chiloé, conducted a population census and found the population consisted of 26,703 inhabitants, 64.4% of which were whites and 33.5% of which were natives.
Finally, in 1812, the Diocese of Concepción conducted a census of areas south of the Maule river, but did not include the indigenous population (estimated at 8,000 people), or the inhabitants of the province of Chiloé, (and estimated population of 210,567, 86.1% of which were Spanish or of European descent, 10% of which were Indians and 3.7% of which were mestizos, blacks and mulattos.