The name Manhattan is derived from an Algonquian term for “island of hills.” In 1524 the island, then inhabited by Native Americans, was probably seen by the Italian navigator Giovanni da Verrazzano. In 1609 the English navigator Henry Hudson made an extensive exploration of the area, and the Dutch laid claim to the island on that basis. In 1624 the Dutch established a trading post on southern Manhattan Island. To secure the claim, Peter Minuit, the director general of the Dutch colony of New Netherland, purchased the island from the Native Americans in 1626 for goods valued at about 60 guilders, or approximately $24. Permanent settlement began the same year at the outpost, which Minuit named New Amsterdam, and it became the administrative center of New Netherland.
In 1664 Charles II of England granted his brother, the duke of York (later James II of England and Ireland) a large area including Manhattan Island. A fleet of English warships seized New Amsterdam in the same year, and the settlement was renamed New York in honor of the duke. The town was retaken by the Dutch in 1673, but a year later they ceded it back to England.
