The island was known as Ile St Jean, a part of Acadia (the Maritime region of New France). French settlers began to arrive there in the 1700's and the population had grown to 5,000 by 1758. When Britain captured the fortress of Louisbourg in Acadia that year (during the Seven Years War), the expulsion of Acadians continued, vacating the land for new settlers. This now included the Acadians of Ile St. Jean, who were forcibly moved from their homes.

At war's end, the island became part of Nova Scotia in 1763. In 1769 it became a separate British colony known as St. John's Island, after intense lobbying by its settlers. Unlike Nova Scotia -- which was mostly settled by colonists from Massachusetts -- the new island colony attracted landowners from Britain, who aspired to transform the island into a sort of oceanside upper class retreat for aristocrats. Apart from lands ceded for towns, there was no Crown land -- it was all under private ownership, assigned by grants in a lottery to military officers and others.

These were mostly absentee landlords who never set foot on the island and tended to neglect their responsibilities to the tenants, while charging them high rents and fees. Large swaths of land remained undeveloped. Colonial officials also had great difficulty collecting tax revenue from the landowners. This situation would be problematic in the years to come, leading to periods of political instability.

The aftermath of the American Revolution saw an influx of some 35-40,000 Loyalist exiles into Canada in the 1780's, with the bulk migrating to Nova Scotia. The colony of New Brunswick was carved out of Nova Scotia in order to accommodate this population surge, though St. John's Island also attracted some Loyalist emigres.

In 1798, Britain changed the colony's name from St.John's to Prince Edward Island in part to distinguish it from other towns that also had the same name (St. John's in Nfld., St. John in N.B.). It was named Prince Edward Island after George III's fourth son, who commanded British troops in Halifax at the time.

By 1850, its population had swollen to about 62,000, mostly from Britain and a sizeable part from Ireland. There was intense pressure on all the Maritime colonies to join the Canadian confederation in the 1860's, with tensions brewing south of the border during the U.S. Civil War and prompting fears of American invasion or annexation. PEI was caught between the demands of its settlers, the colonial office and the absentee landlords.

The colony remained British at first, balking at the terms of union and chose not to proceed with joining Canada in 1867, but soon found itself burdened with huge debts incurred with the construction of a railway across the island. It also became dissatisfied with the colonial office's neglect and the continuing intransigence of the absentee landlords. The colony began to entertain overtures from the U.S. and the possibility of annexation.

Canadian PM John A. Macdonald, anxious to head off U.S. expansionism, brokered a deal that would see the federal government assume the debts of the island railway and buyout any remaining absentee landowners. The colony agreed and joined Confederation on July 1, 1873 to become a new province in Canada.