Nauru was first inhabited by Micronesians and Polynesians at least 3,000 years ago. There were traditionally 12 clans or tribes on Nauru, which are represented in the twelve-pointed star on the country's flag. Traditionally, Nauruans traced their descent matrilineally. Inhabitants practised aquaculture: they caught juvenile ibija fish, acclimatised them to freshwater, and raised them in the Buada Lagoon, providing a reliable food source. The other locally grown components of their diet included coconuts and pandanus fruit. The name "Nauru" may derive from the Nauruan word Anáoero, which means 'I go to the beach.
In 1798, the British sea captain John Fearn, on his trading ship Hunter (300 tons), became the first Westerner to report sighting Nauru, calling it "Pleasant Island", because of its attractive appearance. From at least 1826, Nauruans had regular contact with Europeans on whaling and trading ships who called for provisions and fresh drinking water. The last whaler to call during the age of sail visited in 1904.
Around this time, deserters from European ships began to live on the island. The islanders traded food for alcoholic palm wine and firearms. The firearms were used during the 10-year Nauruan Civil War that began in 1878.
After an agreement with Great Britain, Nauru was annexed by Germany in 1888 and incorporated into Germany's Marshall Islands Protectorate for administrative purposes. The arrival of the Germans ended the civil war, and kings were established as rulers of the island. The most widely known of these was King Auweyida. Christian missionaries from the Gilbert Islands arrived in 1888. The German settlers called the island "Nawodo" or "Onawero". The Germans ruled Nauru for almost three decades. Robert Rasch, a German trader who married a Nauruan woman, was the first administrator, appointed in 1890.
Phosphate was discovered on Nauru in 1900 by the prospector Albert Fuller Ellis. The Pacific Phosphate Company began to exploit the reserves in 1906 by agreement with Germany, exporting its first shipment in 1907. In 1914, following the outbreak of World War I, Nauru was captured by Australian troops. In 1919 it was agreed by the Allied and Associated Powers that His Britannic Majesty should be the administering authority under a League of Nations mandate. The Nauru Island Agreement forged in 1919 between the governments of the United Kingdom, Australia, and New Zealand provided for the administration of the island and extraction of the phosphate deposits by an intergovernmental British Phosphate Commission (BPC). The terms of the League of Nations mandate were drawn up in 1920.
The island experienced an influenza epidemic in 1920, with a mortality rate of 18 per cent among native Nauruans.
In 1923, the League of Nations gave Australia a trustee mandate over Nauru, with the United Kingdom and New Zealand as co-trustees. On 6 and 7 December 1940, the German auxiliary cruisers Komet and Orion sank five supply ships in the vicinity of Nauru. Komet then shelled Nauru's phosphate mining areas, oil storage depots, and the shiploading cantilever. US Army Air Force bombing the Japanese airstrip on Nauru, 1943.
Japanese troops occupied Nauru on 25 August 1942. The Japanese built an airfield which was bombed for the first time on 25 March 1943, preventing food supplies from being flown to Nauru. The Japanese deported 1,200 Nauruans to work as labourers in the Chuuk Islands, which was also occupied by Japan. As part of the Allied strategy of island hopping from the Pacific islands towards the main islands of Japan, Nauru was bypassed and left to "wither on the vine". Nauru was finally liberated on 13 September 1945, when commander Hisayaki Soeda surrendered the island to the Australian Army and the Royal Australian Navy. The surrender was accepted by Brigadier J. R. Stevenson, who represented Lieutenant General Vernon Sturdee, the commander of the First Australian Army, aboard the warship HMAS Diamantina. Arrangements were made to repatriate from Chuuk the 737 Nauruans who survived Japanese captivity there. They were returned to Nauru by the BPC ship Trienza in January 1946.
In 1947, a trusteeship was established by the United Nations, with Australia, New Zealand, and the United Kingdom as trustees. Under those arrangements, the UK, Australia, and New Zealand were a joint administering authority. The Nauru Island Agreement provided for the first administrator to be appointed by Australia for five years, leaving subsequent appointments to be decided by the three governments. However, in practice, administrative power was exercised by Australia alone.
In 1948, Chinese guano mining workers went on strike over pay and conditions. The Administrator for Nauru, Eddie Ward, imposed a state of emergency with Native Police and armed volunteers of locals and Australian officials being mobilised. This force, using sub-machine guns and other firearms, opened fire on the Chinese workers killing two and wounding sixteen. Around 50 of the workers were arrested and two of these were bayoneted to death while in custody. The trooper who bayoneted the prisoners was charged but later acquitted on grounds that the wounds were "accidentally received. The governments of the Soviet Union and China made official complaints against Australia at the United Nations over this incident.
In 1964, it was proposed to relocate the population of Nauru to Curtis Island off the coast of Queensland, Australia. By that time, Nauru had been extensively mined for phosphate by companies from Australia, Britain and New Zealand damaging the landscape so much that it was thought the island would be uninhabitable by the 1990s. Rehabilitating the island was seen as financially impossible. In 1962, Australian Prime Minister, Robert Menzies, said that the three countries involved in the mining had an obligation to provide a solution for the Nauruan people, and proposed finding a new island for them. In 1963, the Australian Government proposed to acquire all the land on Curtis Island (which was considerably larger than Nauru) and then offer the Nauruans freehold title over the island and that the Nauruans would become Australian citizens. The cost of resettling the Nauruans on Curtis Island was estimated to be £10 million, which included housing and infrastructure and the establishment of pastoral, agricultural, and fishing industries. However, the Nauruan people did not wish to become Australian citizens and wanted to be given sovereignty over Curtis Island to establish themselves as an independent nation, which Australia would not agree to. Nauru rejected the proposal to move to Curtis Island, instead choosing to become an independent nation operating their mines in Nauru.
Nauru became self-governing in January 1966, and following a two-year constitutional convention, it became independent in 1968 under founding president Hammer DeRoburt. In 1967, the people of Nauru purchased the assets of the British Phosphate Commissioners, and in June 1970 control passed to the locally owned Nauru Phosphate Corporation (NPC). Income from the mines made Nauruans among the richest people in the world. In 1989, Nauru took legal action against Australia in the International Court of Justice over Australia's administration of the island, in particular, Australia's failure to remedy the environmental damage caused by phosphate mining. Certain Phosphate Lands: Nauru v. Australia led to an out-of-court settlement to rehabilitate the mined-out areas of Nauru.