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Archaeological finds show that the island was first settled by Carians, long before the age of written history and they experienced great prosperity in antiquity. In ancient Astypalea there existed many archaic buildings: the sanctuaries of Athena, Asklepios, Apollo and Artemis. The Astypaleots worshipped Zeus, Dionysos and Dictyna as well as the heroes Achilles and Cleomides.
Astypalea has gone through the Occupation of Crete, the Minoan Era and later on became Greek because of settlers who came from Megara.

During the ancient years, the island must have shown a significant climax as can be witnessed by the various findings, mainly coins that were found during excavations.

Aristotle wrote, "Astypalea’s soil is the enemy of all snakes". The Romans, who appreciated each country’s food most of all, called Astypalea "fish-bearing" because of the great amount and high quality of fish the island has. Plinios attributed healing characteristics to the island’s snails.

In 436 B.C. the island came under the hegemony of Athens and its annual financial contribution, according to the lists, amounted to 12,000 drachmas. Because of the position of the island in the Aegean Sea, between Kos, Rhodes, Knidos and continental Greece, Astypalaia was a field of contest throughout 5th and 4th centuries BC, and it also experienced both Roman and Byzantine Rule. Claimed by Venice in 1207, it fell to the Turks in 1540 and then to Italians from 1912 to 1945. Finally, on 7th March 1948 it was united with Greece.

The main village is Hora or Astypalea, built up the side of a steep hill, and presided over by the massive, austere remains of a Venetian castle. Its small, square houses, painted white with brightly coloured doors and windows, follow the contours of the hill in an almost unbroken band down to the sea. So closely are they packed that the walls of the uppermost houses form part of the outer fortifications of the castle. Astypalea or Chora, which is crowned by a Franco-Byzantine castle whose outer wall largely, consists of houses.

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