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Spain remained officially neutral in World Wars I and II, but suffered through a devastating Civil War (1936-39). During Franco's rule, Spain remained largely economically and culturally isolated from the outside world, but slowly began to catch up economically with its European neighbors. Under Franco, Spain actively sought the return of Gibraltar by the UK, and gained some support for its cause at the United Nations. During the 1960s, Spain began imposing restrictions on Gibraltar, culminating in the closure of the border in 1969. It was not fully reopened until 1985.

With the approval of the Spanish Constitution of 1978 and the arrival of democracy, the old historic nationalities — Basque Country, Catalonia, Galicia and Andalusia— were given far-reaching autonomy, which was then soon extended to all Spanish regions, resulting in one of the most decentralized territorial organizations in Western Europe.

Around 1,100 BC Phoenician merchants founded the trading colony of Gadir or Gades (modern day Cádiz) near Tartessos. In the 8th century BC the first Greek colonies, such as Emporion (modern Empúries), were founded along the Mediterranean coast on the East, leaving the south coast to the Phoenicians. The Greeks are responsible for the name Iberia, after the river Iber (Ebro in Spanish). In the 6th century BC the Carthaginians arrived in Iberia while struggling with the Greeks for control of the Western Mediterranean. Their most important colony was Carthago Nova (Latin name of modern day Cartagena).

Spain is a constitutional monarchy, with a hereditary monarch and a bicameral parliament, the Cortes Generales or National Assembly. The executive branch consists of a Council of Ministers presided over by the President of Government (comparable to a prime minister), proposed by the monarch and elected by the National Assembly following legislative elections.

Through a policy of alliances with other European nobility and the conquest of most of South America and the West Indies, Spain began to establish itself as an empire. The Treaty of Tordesillas, negotiated by Pope Alexander VI between Portugal and Spain, effectively divided up the non-European world between these two budding empires. Massive amounts of gold and silver were imported from the New World into Spain's coffers. However, in the long run this hurt the Spanish economy much more than it helped it. The bullion caused high inflation rates, which undermined the value of Spain's currency. Additionally, Spain became dependent on her colonies for income, and when Queen Elizabeth I of England began to capture Spanish vessels on the way to and from the New World, Spain suffered massive economic losses. These effects, combined with the expulsion of Spain's most economically vital classes in the late 15th century (the Jews and the Moors), caused Spain's economy to collapse several times in the 16th century, bringing the Golden Age of Spain to a close.

Philip V, the first Bourbon king, of French origin, signed the Decreto de Nueva Planta in 1715, a new law that revoked most of the historical rights and privileges of the different kingdoms that conformed the Spanish Crown, unifying them under the laws of Castile, where the Cortes had been more receptive to the royal wish. Spain became culturally and politically a follower of France. The rule of the Spanish Bourbons continued under Ferdinand VI and Charles III. His son Carlos IV was truly incompetent (some say mentally handicapped), and under his reign Spain fell to the armies of Napoleon.

Spain never entered the period of the Dark Ages such as were endured in Britain, Gaul, Lombardy and Germany. The Visigoths tended to maintain more of the old Roman institutions, and they had a unique respect for legal codes that resulted in continuous frameworks and historical records for most of the period between 415, when Visigothic rule in Spain began, and 711, when it is traditionally said to end. The proximity of the Visigothic kingdoms to the Mediterranean and the continuity of western Mediterranean trade, though in reduced quantity, supported Visigothic culture. Arian Visigothic nobility kept apart from the local Catholic population. The Visigoth ruling class looked to Constantinople for style and technology while the rivals of Visigothic power and culture were the Catholic bishops— and a brief incursion of Byzantine power in Cordoba.

Terrorism is a problem of present-day Spain, since ETA (Basque Homeland and Freedom) is trying to achieve Basque independence through violent means, including bombings and murders. Although Basque Autonomous government does not condone any kind of violence, the different approaches to the problem are a source of tension between Central and Basque governments. Besides ETA violence, the conflict in the Basque Country is also shaped by the non-acceptance on the part of the spanish state of the right of basque people to choose freely their political status. Recently, 2 political parties - which in previous elections had received the support of around 15% of the popular vote- have been banned due to their negative to condemn publicly ETA violence in the terms that the main spanish political parties wanted.

The most important minority group in the country are the Gitanos. Other indigenous minorities are Mercheros (or Quinquis) and Vaqueiros de alzada.- The latter, meaning "Mountain cow-breeders" dwell in mountain ranges in the Principality of Asturias and have kept historically apart from the valley dwellers. Foreign minorities include South Americans from countries like Argentina, Ecuador or Colombia; black Africans; Arabs and Berbers mainly from Morocco and other countries of North Africa; and Asians from China, Japan, Korea, and Vietnam.

In the 1960s, more than a decade later than other western European countries, Spain began to enjoy economic growth and gradually transformed into a modern industrial economy with a thriving tourism sector. Growth continued well into the 1970s, with Franco's government going to great lengths to shield the Spanish people from the effects of the oil crisis.

Mainland Spain is dominated by high plateaus and mountain ranges such as the Pyrenees or the Sierra Nevada. Running from these heights are several major rivers such as the Tajo, the Ebro, the Duero, the Guadiana and the Guadalquivir. Alluvial plains are found along the coast, the largest of which is that of the Guadalquivir in Andalusia, in the east there are alluvial plains with medium rivers like Segura, Júcar and Turia. Spain is bound to the east by Mediterranean Sea (containing the Balearic Islands), to the north by the Bay of Biscay and to its west by the Atlantic Ocean, where the Canary Islands off the African coast are found.

Spain was part of the Roman Empire and many areas of Spain retain significant Roman architectural remnants. The Roman aqueduct at Segovia is still in use as of 2004; Mérida, now the Extermaduran capital but once the capital of the Roman province of Lusitania, retains over 5 miles of its Roman aqueduct, Roman bridge over the River Guadiana, an arch of Trajan, and significant remnants of a Roman forum, amphitheatre, and a temple popularly accounted to have been dedicated to Diana (goddess). Another Roman bridge crosses the Tagus River at Alcántara. Lesser Roman ruins can be found in the heart of Barcelona.