Podgorica's favourable position at the confluence of the Ribnica and Morača rivers and the meeting point of the fertile Zeta Plain and Bjelopavlići Valley has encouraged settlement. The city is close to winter ski centres in the north and seaside resorts on the Adriatic Sea.
A census in 2011 put the city's population at 156,169. The Podgorica municipality contains 10.4% of Montenegro's territory and 29.9% of its population. It is the administrative centre of Montenegro and its economic, cultural and educational focus.
Podgorica is at the crossroads of several historically important routes, near the rivers Zeta, Morača, Cijevna, Ribnica, and Sitnica, in the valley of Skadar lake and near the Adriatic Sea, in fertile lowlands with favourable climate. The earliest human settlements were in prehistory: the oldest physical remains are from the late Stone Age. In the Illyrian age, the area between the Zeta and Bjelopavlići valleys was occupied by two Illyrian tribes, the Labeates and the Docleats. The population of the city was 8,000–10,000, in which all core urban issues were resolved. The high population density (in an area of about 10 km/6 mi radius) was made possible by the geographical position, favourable climate and economic conditions and by the defensive positions that were of great importance at that time.
From the 5th century, with the arrival of the first Slavic and Avar tribes and the beginning of the break-up of the Roman Empire, the area bore witness to many noteworthy events. With time, the fortifications ceased their function and new towns were built. Slavic groups in the area were in constant war with Byzantium and tended to establish a new state. The result was establishment of a new settlement that was probably named after the river Ribnica on whose banks it was built. The first mention of Ribnica is during the rule of the Serbian royal family of the Nemanjići. The importance of Ribnica was its position as crossroads in communications with the west. In occupying these areas, the Slavs created a new state and developed their own culture and art, acceptable to the mediaeval church and feudal class.
The name Podgorica was first mentioned in 1326 in a court document of the Kotor archives. The city was economically strong: trade routes between Dubrovnik and the State of Nemanjici, well developed at that time, were maintained via the road that led to Podgorica through Trebinje and Nikšić. As a busy crossroads, Podgorica was a vibrant regional centre of trade and communication. This boosted its development, economic power, military strength and strategic importance.
The Ottoman capture of Podgorica in 1474 interrupted its economic, cultural and artistic development. Podgorica became a kaza of the Sanjak of Scutari in 1479. The Ottomans built a large fortress in Podgorica and the existing settlement, with its highly developed merchant connections, became the main Ottoman defensive and attacking bastion in the region. At the beginning of 1474 there were informations about intention of Ottoman sultan to rebuild Podgorica and Baleč and settle them with 5,000 Turkish families in order to establish an additional obstacle for cooperation of Principality of Zeta and Venetian Shkodër. The fortified city, with towers, gates and defensive ramparts, enabled the Ottomans to resist all attacks. In 1864, Podgorica became a kaza of the Scutari Vilayet called Böğürtlen 'blackberry'. It was also known Burguriçe in Albanian.
The Berlin Congress in 1878 annexed Podgorica to Montenegro, marking the end of four centuries of Ottoman rule, and the beginning of a new era in the development of Podgorica and Montenegro. The city developed quickly and became a strong marketplace. The first forms of capital concentration were seen. In 1904, Zetska savings bank, the first significant financial institution, was formed. It would soon grow into Podgorička bank. Roads were built to all neighbouring towns and, in 1902, a tobacco plant became Podgorica's first significant commercial company.
World War I marked the end of dynamic development for Podgorica, by then the largest city in the newly proclaimed Kingdom of Montenegro. Podgorica was occupied, as was the rest of the country, by Austria-Hungary from 1916 to 1918. After the liberation by the allies in 1918, a controversial Podgorica Assembly was held at Podgorica Tobacco Monopoly building. The assembly marked the end of Montenegrin statehood, as Montenegro was merged with Serbia and incorporated in the Kingdom of Yugoslavia. Between the two world wars, the population of Podgorica was about 13,000.
Podgorica suffered heavily during World War II; the city was bombed over 70 times throughout the course of the war and razed to the ground, causing the deaths of over 4,100 people. The city was liberated on 19 December 1944. Under the name of Titograd, the city became the capital of the Socialist Republic of Montenegro on 13 July 1946. A period of unprecedented expansion followed, which marked the SFRY era: the population increased dramatically, the city was heavily industrialized, infrastructure was improved, and health, educational, and cultural institutions were founded. The city rapidly became the commercial, socio-economic and cultural centre of the country. The progress halted again when the break-up of SFRY began in the 1990s. The name of Podgorica was reinstated on 2 April 1992.
The destructive Yugoslav wars bypassed Montenegro, but the entire country was greatly affected economically. A period of severe economic stagnation lasted throughout the 1990s. The economy began to recover in the early years of the 21st century, when Podgorica began to emerge as a modern, pro-western city. Following the successful independence referendum in May 2006, Podgorica became the official capital of an independent state, boosting its status as a regional centre and raising its economic prospects.