Taiwan's aboriginal peoples, who originated in Austronesia and southern China, live on Taiwan for 12,000 to 15,000 years. Significant migration to Taiwan from the Chinese mainland began as early as 500. In 1590 Portuguese explorers discover present-day Taiwan and name it Formosa. Formosa becomes a Dutch colony in 1642. In 1664 Cheng Ch'eng-kung conquers the island and 1683 his successors submitt the island under control of China. The island is annexed to China. After the Sino-Japanese war China has to hand over Taiwan in 1895 to Japan. Opponents of this handing over inaugurate the Republic of Taiwan in 1895. Presidents are T'ang Ching-sung and Liu Yung-fu, but the same year the republic is extinguished. During its 50 years of colonial rule, Japanese rule leads to the "Japanization" of the island, including compulsory Japanese education and forcing residents of Taiwan to adopt Japanese names. As a result of the Japanese defeat in World War II Taiwan is returned to China in 1945.

From the 1930s onward a civil war is underway on the mainland between Chiang Kai-shek's government of the Kuo-Min Tang (National People's Party, KMT) and the Chinese Communist Party led by Mao Zedong. When the civil war ends in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, flee to Taiwan. That year the People's Republic of China is founded on the mainland by the victorious communists. Chiang Kai-shek establishes a "provisional" KMT capital in Taipei. From that time the Republic of China only includes Taiwan and some islands at the Chinese coast. The Republic is a dictatorial state, lead by the Kuo Min Tang of Chiang Kai-shek, that claims to represent the whole of China. Chiang Kai-shek dies in 1975 and is succceeded by Yen Chia-kan in 1975 and Chiang Ching-kuo in 1978.

Chiang Kai-shek's successor, his son Chiang Ching-kuo, begins to liberalize Taiwan's political system, a process that continues when Lee Teng-hui takes office in 1988. The direct election of Lee Teng-hui as president in 1996 is a further step towards democracy. The KMT remains in power until 2000, when the liberal democratic Min-chu Chin-pu Tang (Democratic Progressive Party, MCT) under Chen Sui-ban wins the elections. At the 2004 elections Chen is confirmed in office with a slim majority in office. These results are disputed by the opposition.