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The peninsula has been inhabited since prehistoric times. Its modern name derives from ancient Greek mythology, specifically the legend of the hero Pelops who was said to have conquered the entire region. The name Peloponnesos means "Island of Pelops". During the Middle Ages, the peninsula was known as the Morea. According to folk etymology, this is because the Crusaders found it densely planted with mulberry trees (Greek: moreai) used by the flourishing silk industry.

Mainland Greece's and Europe's first major civilization, the Aegean or Mycenaean civilization, dominated the Peloponnese in the Bronze Age from the stronghold at Mycenae in the north-east of the peninsula. During classical antiquity, the Peloponnese was at the heart of the affairs of ancient Greece, possessed some of its most powerful city-states and saw some of its bloodiest battles. It was the site of the cities of Sparta, Corinth, Argos and Megalopolis, and was the homeland of the Peloponnesian League. The peninsula was involved in the Persian Wars and was the scene of the Peloponnesian War of 431 BC-404 BC. It fell to the expanding Roman Republic in 146 BC and became the province of Achaea.

The Peloponnese was subsequently ruled by the Byzantine Empire (but some areas were under Slavic rule between 618-805), until the Fourth Crusade in 1204, when it was lost to the Venetians and Franks. The Franks founded the Principality of Achaea in the northern half of the peninsula in 1205, while the Venetians occupied a number of ports around the coast such as Monemvasia Benefşe for Ottomans, Pylos and Koroni, which they retained into the 15th century. The Byzantines regained control of the southeastern part of the peninsula, centred at the fortified hill town of Mystras near Sparta. From there, the Greek Despotate of Morea staged a revival from the mid-13th century through to the mid-15th century, until the Ottoman Turks overran the Peloponnese between 1458–1460. The Venetians occupied the peninsula between 1685–1715, after the successful Morean War (1684-1699) but Ottoman control was reestablished in 1715. Morea was a sanjak of Rumelia Province and her center was Gördes between 1458–1687. Morea was divided to 4 provinces: Romania (Centre: Anaboli), Laconia (Centre: Malvazya), Mezonia (Centre: Navarin) and Akhaia (Centre: Balyabarda) during Venetian rule. Ottoman established Province of Morea in 1715. The province divided to sanjaks of Gördes, Mizistre, Ayamavra, Karliili (Centre was Preveze and bounded to the province between 1715–1717 and 1800-1821), İnebahtı, Balyabarda and Manya. Centre of the Province at first Gördes, after Lontari and Anaboli, at last Trabliçe. Throughout the 18th century, Ottoman authority remained relatively solid and opposed only by rebellions in the Mani Peninsula, the southernmost part of the Peloponnese, and the activities of the bands of the klephts. The Russian-instigated Orlov Revolt of 1770 temporarily threatened Ottoman rule, but was quickly and brutally subdued.

The Peloponnesians played a major role in the Greek War of Independence – the war actually began in the Peloponnese, when rebels took control of KALAVRYTA on March 21, 1821. The decisive naval Battle of Navarino was fought off Pylos on the west coast of the Peloponnese, and the city of Napoli di Romania or Nafplion on the east coast became the seat of independent Greece's first parliament.

During the 19th and 20th century, the region became a relatively poor backwater and a significant part of its population emigrated to the larger cities of Greece, especially Athens, and other countries such as the United States and Australia. It was badly affected by the Second World War and Greek Civil War, experiencing some of the worst atrocities committed in Greece during those conflicts. Living standards have improved dramatically throughout Greece since then, especially after the country's accession to the European Union in 1981. The rural Peloponnese is renowned for being amongst the most traditionalist and conservative regions of Greece and is a stronghold of the right-wing New Democracy party, while the larger urban centres like Kalamata and especially Patra are bastions of the centre-left Panhellenic Socialist Movement.