Nara Prefecture region is considered one of the oldest regions in Japan spanning thousands of years. The present-day Nara Prefecture as it exists now officially was created in 1887, making it independent of Osaka Prefecture.
Historically, Nara Prefecture was also known as Yamato-no-kuni or Yamato Province.
Up to Nara Period
It is certain that there was a political force established at the foot of Mount Miwa in the east of Nara Basin, seeking unification of most parts in Japan from the third century until the fourth century, though the process was not well documented. At the dawn of history, Yamato was clearly the political center of Japan.
Ancient capitals of Japan were built on the land of Nara, namely Asuka-kyō, Fujiwara-kyō (694–710) and Heijō-kyō (most of 710–784). The capital cities of Fujiwara and Heijō are believed to have been modeled after Chinese capitals at the time, incorporating grid layout patterns. The royal court also established relations with Sui and then Tang Dynasty China and sent students to the Middle Kingdom to learn high civilization. By 7th century, Nara accepted the many immigrants including refugees of Baekje who had escaped from war disturbances of the southern part of the Korean peninsula. The first high civilization with royal patronage of Buddhism flourished in today's Nara city (710–784 AD).
Nara in the Heian period
In 784, Emperor Kammu decided to relocate the capital to Nagaoka-kyō in Yamashiro Province, followed by another move in 794 to Heian-kyō, marking the start of the Heian period. The temples in Nara remained powerful beyond the move of political capital, thus giving Nara a synonym of "Nanto" (meaning "South Capital") as opposed to Heian-kyō, situated in the north. Close at the end of Heian period, Taira no Shigehira, a son of Taira no Kiyomori, was ordered by his father to depress the power of mainly Kōfuku-ji and Tōdai-ji, who were backing up an opposition group headed by Prince Mochihito. The movement has led into a collision between the Taira and the Nara temples in 1180, when eventually Kōfuku-ji and Tōdai-ji were set on fire, resulting in the vast loss of its architectures.
At the rise of the Minamoto to its ruling seat and the opening of Kamakura Shogunate, Nara enjoyed the support of Minamoto no Yoritomo toward restoration. Kōfuku-ji, being the "home temple" to the Fujiwara since its foundation, not only regained the power it had before but became a de facto regional chief of Yamato Province. With the recovery of Kōfuku-ji and Tōdai-ji, there was a town growing near the two temples.
The Nanboku-chō period, starting in 1336, brought more instability to Nara. As Emperor Go-Daigo chose Yoshino as his base, a power struggle arose in Kōfuku-ji with a group supporting the South and another siding the North court. Likewise, local clans were split into two. Kōfuku-ji recovered its control over the province for a short time at the surrender of the South Court in 1392, while the internal power game of the temple itself opened a way for the local samurai clans to spring up and fight with each other, gradually acquiring their own territories, thus diminishing the influence of Kōfuku-ji overall.
The Sengoku and Edo periods to present
Later the whole province of Yamato got drawn into the confusion of the Sengoku period. Tōdai-ji was once again set on fire in 1567, when Matsunaga Hisahide, who was later appointed by Oda Nobunaga to the lord of Yamato Province, fought for supremacy against his former master Miyoshi family. Followed by short appointments of Tsutsui Junkei and Toyotomi Hidenaga by Toyotomi Hideyoshi to the lord, the Tokugawa Shogunate ultimately ruled the city of Nara directly, and most parts of Yamato province with a few feudal lords allocated at Kōriyama, Takatori and other places. With industry and commerce developing in the 18th century, the economy of the province was incorporated into prosperous Osaka, the commercial capital of Japan at the time.
The economic dependency to Osaka even characterizes today's Nara Prefecture, for many inhabitants commute to Osaka to work or study there.