Pohnpei was ruled by tribal chiefs in ancient times. Palikir was formerly a tiny village of little consequence. The island of Pohnpei was encountered by the Portuguese and Spanish in the 15th century, but colonial settlement did not occur until 1886 by the Spanish. Later Germany attained the Caroline Islands via purchase from Spain at the end of the Spanish–American War in 1898. During World War I control passed to the Japanese. During World War II, the Japanese built an airport near Kolonia. Subsequent to World War II, the island was administered by the United States Government until FSM attained independence in 1979.  The government of the Federated States of Micronesia decided to convert the Palikir area into a town to house the central administration of the islands as a purpose built capital city. It was declared the capital of Micronesia in 1989. US aid of US$15 million was made available to develop the site into a modern town. All government offices, some residential houses, and the residence of the President of the Federated States of Micronesia were built. It is now the hub of the federal administration of the country, despite still being a village with a population of 4,645.