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At the end of the 17th century, Spain became a declining empire with diminishing revenues and loss of both political and military influence -- especially against other rising powers such as Britain. The Bourbon Reforms (1747-1808) changed the colonial system in the Americas to that of an intendancy. These reforms were directed to increase tax revenues, but became very unpopular among the colonies as most intendants were peninsulares, or people born in Spain.

This power shift increased unrest among criollos, or people of Spanish ancestry who were born in the Americas, who ultimately attained the support of both Amerindians and mestizos (descendants of interracial marriages between Europeans and Native Americans) to wage war against Spanish rule. In Mexico and Central America, Catholic priest Miguel Hidalgo (1753-1811) is considered the starter of such movement, while the South American war of independence was won by liberators Jose de San Martin (1778-1850) and Simon Bolivar (1783-1830).

When Napoleon's Army invaded both Spain and Portugal during the Peninsular Wars (1807-1814), most criollos saw the opportunity to secede from the Spanish Empire. By 1825 most of Latin America became independent, with only some last bastions in Mexico, Peru, Chile and Argentina still being loyal to the Spanish Crown. By 1833 even these were defeated, and all attempts of reconquest by Spain had been already thwarted. Finally, in 1836 the Spanish government renounced to the sovereignty over continental America, with the exception of Cuba an Puerto Rico, which were lost during the Spanish-American War (1898).

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