Amsterdam started to develop from the 13th century, as a trading village along the river Amstel.

Around 1600 it really started to grow, and became one of the richest and most powerful cities in the world. The 17th century is generally called the 'Golden Age'. In this period Amsterdam accumulated a lot of wealth, and the famous ring of canals was developed, which is now a recognized World Heritage monument.

In the 20th century Amsterdam became famous for its liberal culture. In the 1970's it became a main centre of gay culture, and for some time it could call itself the 'Gay Capital of the World'.
Amsterdam is still well-known for its Red Light District (where prostitutes can openly sit in windows to advertize their services) and for its coffeeshops, where soft drugs are openly on sale.

In the 21st century, this liberal culture is under pressure. Amsterdam is still a main gay centre, but other cities in Europe and elsewhere have liberalized too.
The City of Amsterdam wants the Red Light District to become smaller, and generally to upgrade the city center. Amsterdam had to prohibit soft drugs sales to non-residents from the government, but this plan never worked out.