The Cayman Islands remained largely uninhabited until the 17th century. A variety of people settled on the islands, including pirates, refugees from the Spanish Inquisition, shipwrecked sailors, deserters from Oliver Cromwell's army in Jamaica, and slaves. The majority of Caymanians are of African and British descent, with considerable interracial mixing.
Great Britain took formal control of the Caymans, along with Jamaica, under the Treaty of Madrid in 1670. Following several unsuccessful attempts, permanent settlement of the islands began in the 1730s. The Cayman Islands historically have been popular as a tax haven. Legend has it that Caymanians in 1788 rescued the crews of a Jamaican merchant ship convoy which had struck a reef at Gun Bay
and that the Caymanians were rewarded with King George III's promise to never again impose any tax.
The Cayman Islands, initially administered as a dependency of Jamaica, became an independent colony in 1959; they now are a self-governing British Overseas Territory.
From the earliest settlement of the Cayman Islands, economic activity was hindered by isolation and a limited natural resource base. The harvesting of sea turtles to resupply passing sailing ships was the first major economic activity on the islands, but local stocks were depleted by the 1790s. Agriculture, while sufficient to support the small early settler population, has always been limited
by the scarcity of available land.
The advent of modern transportation and telecommunications in the 1950s led to the emergence of what are now considered the Cayman Islands' "twin pillars" of economic development: international finance and tourism. In 2002, there were more than 40,000 companies registered in the Cayman Islands, including 600 banks and trust companies. Forty-three of the world’s largest banks are present in the
The Cayman Islands' physical isolation under early British colonial rule allowed the development of an indigenous set of administrative and legal traditions which were codified into a Constitution in 1959. Although still a British Crown Colony, the islands toady are self-governed in nearly all respects. The Constitution, or Cayman Islands Order, that now governs the islands came into effect in
1972 and was amended in 1984.
Political parties have operated infrequently in the past, and public officeholders tend to be independents. Since the 1970s, groups of candidates have organized themselves into ad hoc coalitions called teams and run on platforms of shared concerns. In November 2000 elections, voters ousted the leader of the government and two other ministers because of legislation enacted to weaken bank
secrecy. Seven new members were elected to the Legislative Assembly.