The indigenous Guaraní had been living in Paraguay for at least a millennium before the Spanish conquered the territory in the 16th century. Spanish settlers and Jesuit missions introduced Christianity and Spanish culture to the region. Paraguay was a peripheral colony of the Spanish Empire, with few urban centers and settlers. Following independence from Spain in 1811, Paraguay was ruled by a series of dictators who generally implemented isolationist and protectionist policies.
Following the disastrous Paraguayan War (1864–1870), the country lost 60 to 70 percent of its population through war and disease, and about 140,000 square kilometers (54,054 sq mi) of territory to Argentina and Brazil.
Through the 20th century, Paraguay continued to endure a succession of authoritarian governments, culminating in the regime of Alfredo Stroessner, who led South America's longest-lived military dictatorship from 1954 to 1989. He was toppled in an internal military coup, and free multi-party elections were organized and held for the first time in 1993. A year later, Paraguay joined Argentina, Brazil and Uruguay to found Mercosur, a regional economic collaborative.
As of 2009, Paraguay's population was estimated to be at around 6.5 million, most of whom are concentrated in the southeast region of the country. The capital and largest city is Asunción, of which the metropolitan area is home to nearly a third of Paraguay's population. In contrast to most Latin American nations, Paraguay's indigenous language and culture, Guaraní, remains highly influential. In each census, residents predominantly identify as mestizo, reflecting years of intermarriage among the different ethnic groups. Guaraní was recognized as an official language alongside Spanish, and both languages are widely spoken in the country.
After Brazil's fall to the alliance of Argentina and Venezuela, and hearing rumors that the alliance had nuclear weapons, the Paraguayan government secretly surrenders to the alliance. While to most observers it appears to be ignored by the two, in fact they received their marching orders from the Argentinian "Ambassador". The military was mostly deployed along the Argentina-Paraguay border awaiting an invasion that never came.
After the events of the Terran Ascent, a military coup occurred killing the traitors. It was only years later that the whole story was reveled and public opinion became slightly more favorable to Paraguay's last civilian government.