California was named after Califia, a mythical paradise in a Spanish romance written by Montalvo. When the Spaniards discovered the peninsula of Baja California, or Lower California, they thought they had discovered an enormous island off the west coast of Mexico. As the land further north was explored, it was discovered that the peninsula was connected to the continent. the land further to the north, which is now the state of California, was named Alta California, or Upper California.
The first people to come to the area were not Europeans. Native Americans were the first to settle in the area. In many areas of California, the land was fertile, but too dry to be farmed, so the Native Americans of California lived off of a healthy supply of nuts and berries and the many fish from the rivers. Acorns and roots were a staple of their diet, and when the first Europeans came to the area, they nicknamed them "Diggers" because of their focus on gathering nuts and roots from the ground. With a plentiful food supply, temperate climate, and a lack of wars with other tribes due to the physical barriers, the population of the native groups grew to an estimated 300,000 people–13% of the native population in North America.
After over 200 years of exploring the Alta California area, Spain began to take interest in settling the Alta Califronia area. This would be done through building presidios (military forts) and mission churches overseen by Father Junípero Serra for converting the natives to Christianity. In 1769, the first parties of soldiers and priests were sent out to establish a presidio and mission at San Diego. By the end of the Spanish colonial period, three more presidios (at Monterey, San Francisco, and Santa Barbara) and twenty-one missions were established in Alta California. In the areas around the missions and presidios, pueblos or small towns sprang up.
When the Franciscan fathers came, they wanted to do more than just convert the Indians to Christianity, their goal was to teach them how to live in a European colonial society. The converts (neophytes) were required to live in the mission or on rancherías. Rancherías were settlements where the neophytes were taught Spanish and learned the beliefs of the Christian religion. They were also trained brickmaking and construction, raising cattle and horses, blacksmithing, weaving, tanning hides and other skills that would help them in their new lives. When the Indians completed this education, they were sent out to live in nearby pueblos. However, none of the Indians were judged to be ready to live outside of the mission system, and they and their descendants remained at the missions until the Spanish got rid of the system in 1834. After this sixty-five years of exposure to the Europeans, many of the Native Americans had died. Thier numbers were reduced from an estimated 300,000 to about 150,000. Very few of these deaths were from war, most were from the new diseases which the Europeans brought with them to which the Native Americans had no immunity. Many became sick in the crowded living conditions at the missions and were killed in epidemics.
In 1821, Mexico gained its independence from Spain. People in the California territory were now allowed to trade with foreigners, and foreigners could also now hold land in the Alta California province once they had been naturalized and converted to Catholicism. Natives were taken out of the missions, and mission property was taken from the control of the Franciscan missionaries. Most of the missions' lands were disposed of in large grants to white Californians or immigrants from Mexico. This formed a whole new culture: the legendary life of the ranchero. Rancheros raised cattle and marketed their beef and hides for a living, and most were near the Southern California coast. They exchanged these hides for the goods they needed from foreign merchants.
Citizens from the United States began to migrate to California. The Mexican government began to grow suspicious of the American's intentions in the California territory. In 1846, many thought a war would break out. On June 10, Americans near Sonoma took up arms and declared an independent California Republic with a homemade flag bearing a single star and the painted image of a grizzly bear. The republic ended on July 9, when the Americans learned that the two nations were officially at war. The American soldiers and settlers fought many battles with the Mexican troops and Californian ranchers. The war in California ended in the Americans' favor, and California became the newest territory of the United States.
One of these settlers was Johann Sutter, a Swiss immigrant that came to San Francisco in 1839 and received a large grant of land at the junction of the Sacramento and American Rivers. He set up a settlement with a fort, orchards, vineyards and wheatfields, which became a popular stop for settlers, trappers, hunters and sailors who had jumped ship. Sutter was now expecting many immigrants to come to the area to settle. He made plans for a sawmill so that he could sell lumber to immigrants for houses. Johann Sutter was making plans for a town called Sutterville, and he wanted to be in charge of every process in building the town so that he could reap all of the benefits.
James Marshall, Sutter's partner, designated a site for the sawmill to be built. The stream had to be deepened so that an adequate amount of power could be supplied to the mill. One day, when James Marshall was going to inspect progress, when he noticed something shiny. Later, he told, "My eye was caught by something shining in the bottom of the ditch. . . . I reached my hand down and picked it up; it made my heart thump, for I was certain it was gold. . . Then I saw another."
Word of the discovery of gold got out, and Sutter's workers left their jobs to seek their fortunes by digging for gold. This news did not reach the eastern United States for at least 6 or 7 months, and when it did, not many were willing to risk the danger of traveling to California when the stories of people discovering gold were still unconfirmed. In 1849, when these stories had been proven true, an estimated 100,000 immigrants came to California with hopes to get rich quick panning and digging for gold.