Grenada was inhabited by Arawak Indians when first discovered on 15 August 1498 by Christopher Columbus, who named it Concepción. By the 18th century, the island was known as Grenada. The origin of that name is unknown, possibly a corruption of the Spanish city of Granada. A secure harbor (at St. George's) attracted traders and some French settlers during the 16th century. After a few failed French private ventures in 1650 and 1657, the French government annexed Grenada in 1674. The island remained under French control until 1762, when Admiral George Rodney captured it for Great Britain. The French regained Grenada in 1779, but the Versailles treaty of 1783 returned Grenada to Britain.
Sugar was Grenada's main product until the 19th century. At that time, the development of spices, especially nutmeg, coupled with the emancipation of slaves in 1834, led to a new economic base for the island. The economy flourished during the second half of the 19th century, and the cultivation of nutmeg, cloves, ginger, and cinnamon, earned Grenada the name Isle of Spice. Grenada's colonial status ended in 1958 when it joined the illfated Federation of the West Indies. In 1962, the federation dissolved, and in 1967, Grenada became an associated state of the UK.
On 28 February 1972, general elections resulted in the victory of Eric Matthew Gairy, who ran under the banner of the proindependence Grenada United Labour Party (GULP). A constitutional conference was held in London during May 1973, and independence was set for the following February. Independence came on 7 February 1974, in spite of widespread strikes and demonstrations protesting Gairy's secret police force, actions that were supported by trade unions in neighboring Barbados and Trinidad and Tobago. Prime Minister Gairy ruled for five years.
On 13 March 1979, the opposition party, the New Jewel Movement, seized power, and Maurice Bishop became prime minister of the People's Revolutionary Government (PRG). Bishop suspended the constitution, jailed opposition leaders, and shut down independent newspapers. The PRG was drawn toward Cuba and its allies in the Caribbean region, as relations with the United States and some of Grenada's more conservative Caribbean neighbors deteriorated.
On 19 October 1983, in the course of a power struggle within the PRG, Bishop and several followers were shot to death, and a hard-line Marxist military council, headed by Gen. Hudson Austin, took over. Six days later, thousands of US troops, accompanied by token forces from seven other Caribbean nations, invaded the island, ostensibly to protect the lives of American students there. Nearly all of the 700 Cubans then in Grenada were captured and expelled. In spite of the UN General Assembly's condemnation of the invasion, Gen. Austin was placed in detention, and the governor-general, Sir Paul Scoon, formed an interim government to prepare for elections. US combat troops were withdrawn in December 1983, but 300 support troops and 430 members of Caribbean forces remained on the island until September 1985.
Elections were held in December 1984, and Herbert Blaize and his New National Party (NNP) won 59% of the popular vote and 14 of the 15 House of Representatives seats. Prime Minister Blaize died in December 1989, and Ben Jones formed a government until the elections of 1990. Those elections elevated the National Democratic Congress (NDC) to majority status and Nicholas Brathwaite became prime minister. By 1993, ten years after the US invasion, tourist arrivals in Grenada had more than tripled, and the Point Salines airport, begun by the ousted Cubans and completed in 1984, was a modern facility servicing international flights.
In his 1994 budget, Brathwaite reintroduced the personal income tax, which had been abolished in 1986. Controversy over the tax helped carry the NNP to victory in the June 1995 election, and Keith Mitchell, who had promised to rescind the tax once again, became the new prime minister.
In November 1998, Mitchell's government lost its parliamentary majority when two members crossed over to the opposition, forcing early elections. In spite of allegations of government corruption, Mitchell's NNP swept the polling, winning all 15 seats in the House of Representatives in the January 1999 elections—the fourth peaceful electoral contest since the 1983 US intervention. Mitchell received credit for bolstering the country's economy and increasing foreign investment. In August 1998, Fidel Castro arrived in Grenada for his first state visit since 1983. Mitchell's government has pursued economic cooperation with Cuba, and Mitchell had visited Cuba the previous year. During the Castro visit, an economic agreement was signed by the two countries. In spite of steady economic growth and low inflation, the IMF issued a warning in 1999 about the state of Grenada's public finances, especially the nation's growing budget deficit, which was partially caused by tax cuts.
In the most recent election in January 1999, the NNP once again won with an overwhelming 62.4% of the vote. Mitchell remained as Prime Minister and the NNP won all 15 seats in the parliament.