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Contemporary Madrid came into its own after the death of the Fascist dictator Franco. Years of the Franco regime left Madrid and much the country in economic shambles due to isolation. With his death, Madrid and Spain as a whole began to re-assert itself on the international stage. Within Spain, reaction against the dictatorial bureaucracy centered in Madrid and a history of centralism that pre-dated Franco by centuries has resulted in the successful modern movement towards increased autonomy for the regions of Spain, considered as European regions, under the umbrella of Spain.

As the Roman empire declined, the Suebi, Vandals and Alans each took control of part of Hispania. In the 5th century AD the Visigoths, a romanized germanic tribe, conquered all of Hispania and established a relatively stable kingdom lasting until 711, when it fell to an invasion by Islamic North African Moors and became part of the expanding Umayyad empire, under the name of Al-Andalus. When the Umayyad empire gave way to the Abbaside empire, an Umayyad exile established the Caliphate of Cordoba, effectively making Al-Andalus independent from the empire.

Through a policy of alliances with other European nobility and the conquest of most of South America and the West Indies, Spain began to establish itself as an empire. The Treaty of Tordesillas, negotiated by Pope Alexander VI between Portugal and Spain, effectively divided up the non-European world between these two budding empires. Massive amounts of gold and silver were imported from the New World into Spain's coffers. However, in the long run this hurt the Spanish economy much more than it helped it. The bullion caused high inflation rates, which undermined the value of Spain's currency. Additionally, Spain became dependent on her colonies for income, and when Queen Elizabeth I of England began to capture Spanish vessels on the way to and from the New World, Spain suffered massive economic losses. These effects, combined with the expulsion of Spain's most economically vital classes in the late 15th century (the Jews and the Moors), caused Spain's economy to collapse several times in the 16th century, bringing the Golden Age of Spain to a close.

Madrid is home to Real Madrid, the world's most successful football club (according to FIFA). There are three other major teams, the Primera Division club Atlético de Madrid, Getafe Club de Futbol and Rayo Vallecano.

Until 1714, Spain was a loose confederation of kingdoms and statelets, under the same king, until King Philip V removed the autonomous status of the Aragonese crown. Moreover, the creation of a unified state in the 19th and 20th centuries has lead to the present situation, apparently simple, but sometimes extremely confusing. During the Second Spanish Republic (1931-1936), the Basque and Catalan were given limited self-government, which was lost after the Spanish Civil War (1936-1939) and restored in 1978 during the transition to democracy.

Philip V, the first Bourbon king, of French origin, signed the Decreto de Nueva Planta in 1715, a new law that revoked most of the historical rights and privileges of the different kingdoms that conformed the Spanish Crown, unifying them under the laws of Castile, where the Cortes had been more receptive to the royal wish. Spain became culturally and politically a follower of France. The rule of the Spanish Bourbons continued under Ferdinand VI and Charles III. His son Carlos IV was truly incompetent (some say mentally handicapped), and under his reign Spain fell to the armies of Napoleon.

Madrid is also noted for its nightlife and discotheques. Younger madrileños sometimes dance all night, stop off for chocolate y churros at dawn, go home, shower, shave, and go to work. This nightlife, called la movida or la marcha and initially focussed on the Plaza del Dos de Mayo, flourished after the death of Franco, especially during the 80's while Madrid's most cherished mayor Enrique Tierno Galván was in office. A particular hub for this night activity is nowadays the nearby gay village of Chueca. However, as prices continue to rise and more jobs become available, nightlife in Madrid is becoming more and more like that of other European cities such as Stockholm or Munich.

Mistreatment of the Moorish population in Morocco led to an uprising and the loss of all North African possessions except for the enclaves of Ceuta and Melilla in 1921. Abd el-Krim, Annual. In order to avoid accountability, the king Alfonso XIII decided to support the dictatorship of general Miguel Primo de Rivera.