Artefacts found near Kandivali in northern Mumbai indicate that these islands had been inhabited since the Stone Age. Documented evidence of human habitation dates back to 250 BC, when it was known as Heptanesia (Ptolemy) (Ancient Greek: A Cluster of Seven Islands). In the 3rd century BC, the islands formed part of the Maurya Empire, ruled by the Buddhist emperor, Aşoka. During its first few centuries, control over Mumbai was disputed between the Indo-Scythian Western Satraps and the Satavahanas. The Hindu rulers of the Silhara Dynasty later governed the islands until 1343, when the kingdom of Gujarat annexed them. Some of the oldest edifices of the archipelago – the Elephanta Caves and the Walkeshwar temple complex date from this era.

In 1534, the Portuguese appropriated the islands from Bahadur Shah of Gujarat. They were ceded to Charles II of England in 1661, as dowry for Catherine de Braganza. These islands, were in turn leased to the British East India Company in 1668 for a sum of £10 per annum. The company found the deep harbour on the east coast of the islands to be ideal for setting up their first port in the sub-continent. The population quickly rose from 10,000 in 1661, to 60,000 in 1675; In 1687, the British East India Company transferred its headquarters from Surat to Mumbai. The city eventually became the headquarters of the Bombay Presidency.

From 1817 onwards, the city was reshaped with large civil engineering projects aimed at merging all the islands in the archipelago into a single amalgamated mass. This project, known as the Hornby Vellard, was completed by 1845, and resulted in the total area swelling to 438 km². In 1853, India's first passenger railway line was established, connecting Mumbai to the town of Thane. During the American Civil War (1861–1865), the city became the world's chief cotton trading market, resulting in a boom in the economy and subsequently enhancing the city's stature.

The opening of the Suez Canal in 1869 transformed Bombay into one of the largest seaports on the Arabian Sea. Over the next thirty years, the city grew into a major urban centre, spurred by an improvement in infrastructure and the construction of many of the city's institutions. The population of the city swelled to one million by 1906, making it the second largest in India after Calcutta. As capital of the Bombay Presidency, it was a major base for the Indian independence movement, with the Quit India Movement called by Mahatma Gandhi in 1942 being its most rubric event. After India's independence in 1947, it became the capital of Bombay State. In the 1950 the city expanded to its present limits by incorporating parts of Salsette island which lay to the north.

After 1955, when the State of Bombay was being re-organised along linguistic lines into the states of Maharashtra and Gujarat, there was a demand that the city be constituted as an autonomous city-state. However, the Samyukta Maharashtra movement opposed this, and insisted that Mumbai be declared the capital of Maharashtra. Following protests in which 105 people were killed by police firing, Maharashtra state was formed with Mumbai as its capital on May 1, 1960.

The late 1970s witnessed a construction boom and a significant influx of migrants, which saw Mumbai overtake Kolkata as India's most populous city. This influx caused unrest among local Maharashtrians who worried about the loss of culture, jobs, and language. The Shiv Sena Party was formed by Balasaheb Thackeray for the purpose of securing the interests of Maharashtrians. The city's secular fabric was torn apart in the riots of 1992–93, after large scale sectarian violence caused extensive loss of life and property. A few months later, on March 12, a series of co-ordinated bombings at several city landmarks by the Mumbai underworld killed around three hundred people. In 1995, the city was renamed Mumbai by the Shiv Sena government of Maharashtra, in keeping with their policy of renaming colonial institutions after historic local appellations. There have also been terrorist attacks, sponsored by Islamic extremists, on public transport buses in past years. In 2006, Mumbai was also the site of a major terrorist attack in which over two hundred people were killed when several bombs exploded almost simultaneously on the Mumbai Suburban Railway.

 

 

The name Mumbai is an eponym, etymologically derived from Mumba or Maha-Amba— the name of the Hindu goddess Mumbadevi, and Aai — mother in Marathi. The former name Bombay had its origins in the 16th century when the Portuguese arrived in the area and called it by various names, which finally took the written form Bombaim, still common in current Portuguese use. After the British gained possession in the 17th century, it was anglicised to Bombay, although it was known as Mumbai or Mambai to Marathi and Gujarati-speakers, and as Bambai in Hindi, Urdu. The name was officially changed to its original pronunciation of Mumbai in 1995.

A widespread explanation of the origin of the traditional English name Bombay holds that it was derived from a Portuguese name meaning good bay. This is based on the fact that bom (masc.) is Portuguese for good whereas the English word bay is similar to the Portuguese baía (fem., bahia in old spelling). The normal Portuguese rendering of good bay would have been boa bahia rather than the grammatically incorrect bom bahia. However, it is possible to find the form baim (masc.) for little bay in sixteenth-century Portuguese.

Other sources have a different origin for the Portuguese toponym Bombaim. José Pedro Machado's Dicionário Onomástico Etimológico da Língua Portuguesa ("Portuguese Dictionary of Onomastics and Etymology") mentions what is probably the first Portuguese reference to the place, dated from 1516, as Benamajambu or Tena-Maiambu, pointing out that "MAIAMBU"' seems to refer to Mumba-Devi, the Hindu goddess after which the place is named in Marathi (Mumbai). In that same century, the spelling seems to have evolved to Mombayn (1525) and then Mombaim (1563). The final form Bombaim appears later in the 16th century, as recorded by Gaspar Correia in his Lendas da �ndia ("Legends of India"). J.P. Machado seems to reject the "Bom Bahia" hypothesis, asserting that Portuguese records mentioning the presence of a bay at the place led the English to assume that the noun (bahia, "bay") was an integral part of the Portuguese toponym, hence the English version Bombay, adapted from Portuguese.

Mumbai is the commercial and entertainment centre of India, generating 5% of India's GDP and accounting for 25% of industrial output, 40% of maritime trade, and 70% of capital transactions to India's economy. Mumbai is one of the world's top ten centres of commerce by global financial flow, home to such important financial institutions as the Reserve Bank of India, the Bombay Stock Exchange, the National Stock Exchange of India and the corporate headquarters of many Indian companies and numerous multinational corporations. The city also houses India's Hindi film and television industry, known as Bollywood. Mumbai's business opportunities, as well as its high standard of living, attract migrants from all over India and, in turn, make the city a potpourri of many communities and cultures.