Although there's some evidence that Patagonian Indians reached the Falklands in rudimentary canoes, the islands were uninhabited when Europeans began to frequent the South Atlantic in the 17th century. A British expedition made the first documented landing in 1690, whereupon they claimed the islands for the crown and named the sound between the two main islands after a British naval officer, Viscount Falkland. The name was later applied to the whole island group.
No European power established a settlement on the islands until France landed a garrison at Port Louis on East Falkland in 1764. (A small community of fishermen from St Malo lent the islands their French name, Îles Malouines, from which the Spanish Islas Malvinas derives.) When Spain caught wind of the settlers' presence, they pressured the French government to remove the garrison by citing the papal Treaty of Tordesillas, which had divided the New World between Spain and Portugal. The French complied, and in 1767 the Spanish went on to oust a British settlement at West Falkland's Port Egmont too. (Under threat of war, Spain restored the settlement the following year; the British gave it up of their own accord in 1774, though they held tight to their territorial claims.) The Spanish erected a penal colony at Port Louis, only to abandon it in the early 18th century as the town's ranks swelled with maverick whalers and sealers.
In the late 1820s, nearly a decade after Buenos Aires declared its independence from Spain, a government-backed entrepreneur from Buenos Aires, Louis Vernet, moved to the Falklands and asserted himself as its governor. In 1831, his seizure of three American sealing ships triggered reprisals from a hot-headed US naval officer, whose retaliatory attack left Port Louis beyond restoration. Vernet scampered back to Buenos Aires, leaving a token Argentine force in Port Louis until 1833, when they were expelled by the returning British.
Under the Brits, the Falklands languished in isolation until the mid-19th century, when sheep ranching replaced cattle and wool became an important export commodity. The English-owned Falkland Islands Company swallowed most of the island's best land, and all remaining pastoral land was occupied by immigrant shepherds by the 1870s. With each succeeding generation, more and more landowners retreated to Britain and ran their businesses as absentees. The UK granted the islands colonial status in 1892.
In the 1970s, the local government began encouraging the sale and subdivision of large landholdings to slow high rates of emigration, and nearly every unit was snapped up by local family farmers. Other major changes to the economy came with the expansion of deep-sea fishing in the surrounding South Atlantic and with the Falklands War.
Since their departure in 1833, no Argentine government had given up claims of sovereignty over the Falklands. Though the British were slow to publicly acknowledge Argentina's seriousness, by the late 1960s, they began to view the distant islands as a politically burdensome anachronism to be discarded with all judicious speed. Britain's alliances with Argentina's military government - giving the latter a significant voice in issues of the Falklands' transportation, fuel supplies, shipping and immigration - began to worry the pro-British islanders. Argentina's brutal Dirty War in 1976 did little to alleviate their concerns.
The waiting period for an official handover proved too lengthy for Argentina's itchy-fingered military junta, and in April 1982 they invaded the Falklands and set up outposts in South Georgia and the South Sandwich Islands. The seizure briefly rallied Argentines behind their government, until Britain sent a naval task force to retake the islands. After 72 days and nearly 1000 casualties (three-quarters of whom were Argentine), the war ended with Argentina's surrender and its president's resignation. Following the war, most Falklanders wanted little to do with Argentina, preferring to emphasize their ties with Britain and build upon their relationship with Chile. Today, Argentine president Carlos Menem continues to publicly renounce the use of force to support his country's claim to the islands while also bragging that the Falklands will be Argentine any day now.