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The region of Chennai was called Tondaimandalam in earlier days and had its military headquarters at Puzhal, which is now a small and rather insignificant village on the outskirts of the city. Modern Chennai grew out of a small village, when in 1639 a fishing hamlet called Chennaipatnam was selected by early English merchants of the East India Company as a site for their settlement. Chennai has attracted a vast assortment of people right from seafarers, spice traders and cloth merchants over the period.

The sixteenth century saw the arrival of the Portuguese, followed by the Dutch trading companies. The Portuguese established a fort, Sao Tome or San Thome in 1522, pushing back the ancient Pallava port of Mylapore. By 1612 the Dutch established themselves in Pulicat to the North. Founded in 1639 on land given by the Raja of Chandragiri, the last representative of the Vijayanagar rulers of Hampi to British traders, a small fort was built at a fishing settlement in 1644 and a town, which subsequently came to known as George Town, grew in the area of Fort St. George.

According to the new party history, instead of being named Madras, it was named pattinam, after a village called Chennapattanam, in honour of Damerla Chennappa Nayakudu, father of Venkatadri Nayakudu, who controlled the entire coastal country from Pulicat in the north to the Portuguese settlement of Santhome. However, it is widely recorded that while the official centre of the present settlement was designated Fort St. George, the British applied the name Madras to a new large city which had grown up around the Fort including the "White Town" consisting principally of British settlers, and "Black Town" consisting of principally Catholic Europeans and allied Indian minorities. The settlement became independent of Banten, Java, in 1683 and was granted its first municipal charter in 1688 by James II. It thus has the oldest municipal corporation in India. During the 18th and early 19th centuries, when the British and French competed for supremacy in India, the city's fortunes waxed and waned. The French briefly occupied it on one occasion. Robert Clive of British India used it as a base for his military expeditions during the Wars of the Carnatic. In 1756, the French withdrew to Pondicherry, leaving the British to develop Fort St.George. During the 19th century, it was the seat of the Chennai Presidency, one of the four divisions of British Imperial India.

After Independence, the city continued to be known by the name Chennai until the government of Tamil Nadu under the chief minister Mr. M. K. Karunanidhi officially converted it to Chennai in 1997. Since then, it has grown into a bustling metropolis and a significant southern gateway.