The Cayman Islands were sighted by Christopher Columbus, on 10 May 1503 on his fourth and final voyage to the New World. He named the islands Las Tortugas after the numerous sea turtles there. The first recorded English visitor to the islands was Sir Francis Drake, who landed there in 1586 and named them the Cayman Islands after caiman, the Neo-Taino nations' term for alligator.
The Cayman Islands remained largely uninhabited until the 17th century. A variety of people settled on the islands, including pirates, refugees from the Spanish Inquisition, shipwrecked sailors, deserters from Oliver Cromwell's army in Jamaica, and slaves. The majority of Caymanians are of African and English descent, with considerable interracial mixing.
The first recorded permanent inhabitant of the Cayman Islands, Isaac Bodden, was born on Grand Cayman around 1661. He was the grandson of the original settler named Bodden who was probably one of Oliver Cromwell's soldiers at the taking of Jamaica in 1655.
The England took formal control of the Cayman Islands, along with Jamaica, under the Treaty of Madrid in 1670. Following several unsuccessful attempts at settlement, residency in the islands began in the 1730s. The islands were governed as a single colony with Jamaica until 1962 when they became a separate Crown colony while Jamaica became an independent Commonwealth realm.
The Cayman Islands historically have been a tax-exempt destination. On February 8, 1794, the Caymanians rescued the crews of a group of ten merchant ships, including HMS Convert. The ships had struck a reef and run aground during rough seas. Legend has it that King George III rewarded the island with a promise never to introduce taxes as compensation for their generosity as one of the ships carried a member of the King's own family, his son Prince William. While this remains a popular legend, Queen Elizabeth II herself, along with various history books, state the story is not true.
The island of Grand Cayman, which lies largely unprotected at sea level, was hit by Hurricane Ivan on 11–12 September 2004. Ivan's storm surge completely over-washed Grand Cayman, and an estimated 95% of the buildings on the island were either damaged or destroyed. Power, water and communications were disrupted in some areas for months as Ivan was the worst hurricane to hit the islands in 87 years. Grand Cayman began a major rebuilding process and within two years, its infrastructure was nearly returned to pre-hurricane status. Due to the tropical location of the islands, more hurricane or tropical systems have affected the Cayman Islands than any other region in the Atlantic basin; it has been brushed or directly hit, on average, every 2.23 years.