Bombay is built on a group of seven islands originally lush with palm groves and paddy fields, and occupied by communities of kali fishermen and Farmers. Its link with the mainland of Konkan was through another group of larger islands—-the Salsette group lying athwart the Ulhas estuary. Though many ancient ports such as Sopara, Thana, Kalyan and Chaul in the neighbourhood were there for centuries contact points with Arabs and Africans, the Portuguese were the first to recognize the worth of a sheltered harbour site in one of the islands. According to some the name Bombay is a corrupt form of Bombaim, or Boa vida, meaning “lucky harbour” in Portuguese.
The Portuguese built a quinta and a few churches in the main island of Bombaim and used it as a trading post. With the transfer of the islands to the British king as dowry, and the subsequent leasing of the islands to the East India Company for apittance of 30 pounds a year, the growth of Bombay as a port city began. A British town was laid close to the site of the Portuguese manor house and south of the Hindu town of Girgaum and the Muslim town of Mandvi. During the late 18th and early 19th centuries the islands were interconnected, and the intervening seas and creeks filled and reclaimed. Each phase of reclamation was followed by the laying of east-west running roads such as the Charni Road, the Giant Road and the Bellasis Road. Two north-south running roads, reaching the old Hindu settlements of Dadar-Parel and Mahim were also laid. With the building of the Mahim and Sion Causeways, communications with Salsette were improved by the middle of the last century. New docks were laid along the eastern waterfront overlooking the Thana creek, and the Harbour Bay was deepened with further increase in population and commercial activities, thetown gradually extended westwards along the Back Bay to Malabar and Cumbala hills and northwards to Byculla.After the Great Fire of 1803 in which old fort town was destroyed a new township was built. Malabar Hill became the Governor's resort and the present day areas of Dhobi Talao, and Chaupaty became part of the city.
A new factor entered into Bombay's development when a modest beginning was made to lay Bombay-Thana rail link of 33 km in 1853. Within two decades Baroda, Jabalpur, Nagpur and Raichur were rail-linked with Bombay. The completion of north-south roads during the same period led to the extension of the city northwards, and the completion cable-link with Europe further strengthened commercial and other relations between Bombay and the rest of the world. By the turn of the century, cotton spinning industry was established in Parel-Naigaum, Dadar-Prabhadevi, and Mahalaxmi-Lovegrove areas, then outside the city limits. The ready market for the yarn in China, and the excellent access by rail to the raw-material producing hinterland in Gujarat, Khandesh and Berar saw the growth of this mill industry to a spectacular level. In 1900, there were 136 units. Bombay became the Manchester of the East, employing nearly a lakh of workers, largely drawn from the districts of Konkan and Satara.
In the first few decades of the current century, the cotton mill industry went through a crisis leading to a shift from spinning to weaving. It, however, faced competition from competing centres of textile industry in the country and abroad, and its eccentric location in relation to the national markets for textile goods. It made several other adjustments but they could not effectively stem the decline of the industry run on old lines with worn-out machinery. The thirties of this century, thus, saw the rise of oil-mills, structural machine building and small engineering units.The post-independence policy of promotion of indigenous industrial output gave rise to a wide range of light and medium engineering, chemical and drug industries, refineries and associated petrochemicals, including fertilizers.
The vast expansion in industrial activities further increased the commercial and port functions of the city. The entire eastern waterfront extending from Colaba to Trombay started, humming with port activities; many business houses and financial institutions came into existence, and warehousing and bulk handling facilities increased. A wholesale trade area emerged in an area north of the Fort, south of the old Hindu and Muslim towns and adjoining the docks, close to the VT rail terminal in the Market- area. Soon city engulfed the urban realm of the whole island and spread further beyond in Salsette, developing suburb and absorbing them all into a well-knit city of metropolitan dimensions.
Ed. R P Misra, Historical Background, in Million Cities of India, Vikas Publishing House, New Delhi. 1978. p. 74-76.