The process by which Venezuela came into being as a nation can be divided into three stages: discovery, conquest and settlement. The shores of Venezuela were discovered by Christopher Columbus on his third voyage to the New World in 1498. It was his first sighting of the American mainland and such were its natural beauties that he named the new territories the "Land of Grace". His reports of bounties induced the exploration of the Caribbean coast as far as Lake Maracaibo. It was the Italian geographer and navigator, Americo Vespucci, (whose name also came to identify the New World) who named the area "Little Venice", or Venezuela, because of the resemblance of the native stilt houses found on the shores of Lake Maracaibo to the Venetian dwellings of the time.

The 16th Century was a time of exploration and discovery throughout the South American continent. Nueva Cadiz, on the Island of Cubagua, founded in 1516 and later destroyed by an earthquake, was the first city in South America. Soon afterwards the cities of Coro, on the west, and Cumana, on the east, were founded on the mainland. From there, expeditions for the discovery of the territory were conducted under the guidance of the Spanish Crown.

A unique feature in this process was introduced when in 1528 Carlos I of Spain, who was also the Holy Roman Emperor, gave the German banking house of Weiser the right to conquer and settle in the western part of Venezuela. The German mandate, largely ineffective, was terminated in 1546. A more stable and continuous process of settlement began in 1556. This period saw the birth of most of Venezuela's cities. Caracas was founded by Diego de Losada in 1567.

Venezuela's present patterns of settlement were shaped during the process of colonization that characterized the 17th Century.

During the 18th Century Venezuela underwent a process of administrative consolidation. It was in 1777 that the provinces of Venezuela, Nueva Andalucia, Merida, Maracaibo and Guayana were unified in what became known as the Captaincy-General of Venezuela.

By 1786 Caracas became the administrative center of the province and of the ecclesiastical, judicial, military and educational institutions. The province was governed by a representative of the Crown although it benefited from a significant degree of autonomy at the municipal level.

During the over three centuries of Spanish rule Venezuela never attained the very significant economic and political importance of the major vice-royalties upon which Spain relied for the administration of its American provinces. Its mineral riches had not yet been discovered and its agricultural conditions and climate were less attractive than those of other colonized lands. Venezuela's population remained small, with an economy based mainly on a few agricultural crops, extensive cattle raising and a relatively small share of colonial trade.

By the late 18th century, the strong ideological influence of the European "Enlightenment" and of the American and French Revolutions, combined with widespread discontent with the Spanish economic and political regime, gave rise to the independence movement. Indeed, Venezuela was one of the first provinces in the New World to declare itself independent. Napoleon's invasion of Spain and Ferdinand VII's subsequent abdication to the crown precipitated the events.

In 1810 Venezuela formally declared its independence from Spain and in 1811 adopted a republican constitution. However, it was not until 1821, under the leadership of Simón Bolívar, that full independence was achieved following the struggle of the War of Independence.