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Spanish conquistador Pedro de Valdivia founded 'Santiago del Nuevo Extremo' on February 12, 1541, at the bottom of the Huelén hill, now known as Cerro Santa Lucía. He implemented a regular street grid from the present-day Plaza de Armas. Just six months later Mapuche warriors almost obliterated the new settlement and colonists nearly starved under indigenous pressure. Santiago was later rebuilt to the original plans.

By the late 16th century the city was a settlement of just 200 houses. It wasn't until the end of the 18th century that Santiago began to acquire the infrastructure of a proper city - the cathedral and La Moneda (the official colonial mint, later to become the presidential seat of power) were both built at this time. Meanwhile, wealthy encomenderos (landowners) began to stamp their mark as the dominant economic and political force in the capital.

When colonial rule ended in the early 19th century, Santiago was relatively undeveloped with around 30, 000 residents. By the mid-19th century, thanks in part to soaring exports triggered by the Californian gold rush, the capital swelled to more than 100, 000 inhabitants.

Benjamín Vicuña Mackenna became mayor in 1872 and shaped much of Santiago's development. Using forced labor, he transformed Santa Lucía into the beautifully landscaped public park that still exists today; he also oversaw the canalization of the Mapocho and the completion of the impressive Teatro Municipal.

But not everyone prospered. Poverty drove many farm laborers into the cities: between 1865 and 1875 Santiago's population increased from 115, 000 to more than 150, 000. After WWII rapid industrialization created urban jobs but never enough to satisfy demand. In the 1960s continued urban migration resulted in squatter settlements known as callampas (mushrooms, so-called because they sprang up virtually overnight) around the city's outskirts. By the 1970s, more than 70% of all Chileans lived in cities, mostly in the heartland.

Santiago was at the center of the 1973 coup (although its tentacles spread quickly) that deposed Salvador Allende, the world's first democratically elected Marxist leader. He took his own life in La Moneda, which suffered heavy damage during the September 11 putsch. These were dark days for the city. Thousands of political prisoners were rounded up in the national stadium, and torture centers and makeshift prisons pockmarked Santiago.

The iron-fisted military rule forced much of the artistic community out of the city. Since the restoration of a democratically elected leader in 1990, the scars of the dictatorship have been fading gradually - although it will be decades before they heal completely.

The Chilean capital today is a vast urban sprawl with sharp contrasts between the 'haves' in the affluent eastern suburbs of Las Condes, Vitacura and La Reina, and the 'have-nots' in the poor suburbs of the south such as La Pintana. Authorities are steadily improving some of the city's problems, for example congestion and pollution. However, the social inequalities - although less pronounced than in other Latin American cities - look set to linger for some time at least.