By the end of the sixteenth century the Spanish and Portuguese had successfully overcome most indigenous groups and expanded their territory throughout modern-day Mexico, the southwestern United States, and Central and South America. In Mesoamerica and the Andes, the Spanish had taken over the cities and tribute systems of the Aztecs and the Incas, basing their control on the prior existence of well-established polities with organized tribute systems.

While early conquest and settlement were conducted largely by private initiatives, the Spanish and Portuguese governments soon assumed more direct control. In 1503 the Spanish granted the port of Seville a monopoly over all traffic to the New World and established the House of Trade, or Casa de Contratación, to oversee economic matters. In 1523 Spain created the Royal and Supreme Council of the Indies, with authority over all colonial affairs subject to approval by the king. Spanish territories themselves were divided initially into two viceroyalties, or administrative divisions: New Spain, created in 1535; and Peru, created in 1542. In the eighteenth century, two new viceroyalties, New Granada and La Plata, were created (see Map 16.2).

Within each territory, the viceroy, or imperial governor, exercised broad military and civil authority. The viceroy presided over the audiencia (ow-dee-EHN-see-ah), a board of judges that served as his advisory council and the highest judicial body. As in Spain, settlement in the Americas was centered on cities and towns. In each city, the municipal council, or cabildo, exercised local authority.

In Portugal, the India House in Lisbon functioned much like the Spanish House of Trade, and royal representatives oversaw its possessions in West Africa and Asia, as did governors in Spanish America. To secure the vast expanse of Brazil, however, the Portuguese implemented a distinctive system of rule, called captaincies, in the 1530s. These were hereditary grants of land given to nobles and loyal officials who bore the costs of settling and administering their territories. Over time, the Crown secured greater power over the captaincies, appointing royal governors to act as administrators.

Throughout the Americas, the Catholic Church played an integral role in Iberian rule. The papacy allowed Portuguese and Spanish officials greater control over the church than was the case at home, allowing them to appoint clerics and collect tithes. This control helped colonial powers use the church as an instrument to indoctrinate indigenous people (see “Religious Conversion”).