How can volcanoes form in Chile?

Answer 1

Off the coast of Chile two tectonic plates come together. The Nazca Plate, an oceanic plate, is slowly sliding into and under the South American Plate. As it sinks into the mantle this plate takes seawater and other volatiles with it. These substances seep into the mantle and lower the melting point of the rock. This forms molten magma that rises though the crust of the South American Plate to erupt from volcanoes.

Answer 2

There are three geologic settings that produce volcanoes: convergent plate boundaries, divergent plate boundaries, and hot spots.
Iceland is in the unusual position of being over both a divergent plate boundary and a hot spot. At a divergent plate boundary such as the Mid-Atlantic Ridge that Iceland is a part of, two plates move apart as new crust forms. This new crust is thin, and puts less pressure on the upper mantle, allowing the rock to melt more easily and erupt at the surface to form volcanoes. The volcanoes then form new crust, creating a self-perpetuating process.
At a hot spot a portion of the mantle is hotter than normal, causing some rock to melt. This molten material then rises through the crust to form volcanoes. At iceland these forces have combined to produce a high concentration of volcanoes.