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Prior to European settlement, the Dakota Sioux were the sole occupants of the site of modern-day Minneapolis. In Dakota language, the city's name is Bdeóta Othúŋwe (Many Lakes City). The French explored the region in 1680. Gradually, more European-American settlers arrived, competing with the Dakota for game and other natural resources. Following the Revolutionary War, the 1783 Treaty of Paris gave British-claimed territory east of the Mississippi River to the United States. In 1803, the U.S. acquired land to the west of the Mississippi from France in the Louisiana Purchase. In 1819, US Army built Fort Snelling at the southern edge of present-day Minneapolis to direct Native American trade away from British-Canadian traders, and to deter warring between the Dakota and Ojibwe in northern Minnesota. The fort attracted traders, settlers and merchants, spurring growth in the surrounding region. At the fort, agents of the St. Peters Indian Agency enforced the US policy of assimilating Native Americans into European-American society, encouraging them to give up subsistence hunting and to cultivate the land. Missionaries encouraged Native Americans to convert from their own religion to Christianity. The U.S. government pressed the Dakota to sell their land, which they ceded in a series of treaties that were negotiated by corrupt officials. In the decades following the signings of these treaties, their terms were rarely honored. During the American Civil War, officials plundered annuities promised to Native Americans, leading to famine among the Dakota. In 1862, a faction of the Dakota who were facing starvation declared war and killed settlers. The Dakota were interned and exiled from Minnesota.

While the Dakota were being expelled, Franklin Steele laid claim to the east bank of Saint Anthony Falls, and John H. Stevens built a home on the west bank. Residents had divergent ideas on names for their community. In 1852, the city's first schoolmaster Charles Hoag proposed Minnehapolis, with a silent h, combining the Dakota word Mníȟaȟa (waterfall) and the Greek word for polis (city), which became Minneapolis (city of the falls). In 1851 after a meeting of the Minnesota Territorial Legislature, leaders of St. Anthony lost their bid to move the capital from Saint Paul. In a close vote, St. Paul and Stillwater agreed to divide federal funding between them: St. Paul would be the capital. Stillwater would build the prison. The St. Anthony contingent eventually won the state university. In 1856, the territorial legislature authorized Minneapolis as a town on the Mississippi's west bank. Minneapolis incorporated as a city in 1867 and in 1872, it merged with the city of St. Anthony on the river's east bank.

Minneapolis developed around Saint Anthony Falls, the highest waterfall on the Mississippi River, which was used as a source of energy. A lumber industry was built around forests in northern Minnesota, and 17 sawmills operated from energy provided by the waterfall. By 1871, the river's west bank had 23 businesses, including flour mills, woolen mills, iron works, a railroad machine shop, and mills for cotton, paper, sashes and wood-planing. Due to the occupational hazards of milling, by the 1890s, six companies manufactured artificial limbs. Grain grown in the Great Plains was shipped by rail to the city's 34 flour mills. A 1989 Minnesota Archaeological Society analysis of the Minneapolis riverfront describes the use of water power in Minneapolis between 1880 and 1930 as "the greatest direct-drive waterpower center the world has ever seen". Minneapolis led the world[clarification needed] in flour milling for 50 years.

Cadwallader C. Washburn, a founder of modern milling and of what became General Mills, converted his business from gristmills to "gradual reduction" by steel-and-porcelain roller mills that were capable of quickly producing premium-quality, pure, white flour. William Dixon Gray developed some ideas and William de la Barre acquired others through industrial espionage in Hungary. Charles Alfred Pillsbury and the C.A. Pillsbury Company across the river hired Washburn employees and immediately began using the new methods. The hard, red, spring wheat grown in Minnesota became valuable ($0.50 profit per barrel in 1871 increased to $4.50 in 1874), and Minnesota "patent" flour was recognized as the best in the world. Later consumers discovered value in the bran that " ... Minneapolis flour millers routinely dumped" into the Mississippi. A single mill at Washburn-Crosby could make enough flour for 12 million loaves of bread each day and by 1900, 14 percent of America's grain was milled in Minneapolis. By 1895, through the efforts of silent partner William Hood Dunwoody, Washburn-Crosby exported four million barrels of flour a year to the United Kingdom. When exports reached their peak in 1900, about one third of all flour milled in Minneapolis was shipped overseas.

In 1886, when Martha Ripley founded Maternity Hospital for both married and unmarried mothers, Minneapolis made changes to rectify discrimination against unmarried women. Known initially as a kindly physician, mayor Doc Ames made his brother police chief, ran the city into corruption, and tried to leave town in 1902. Lincoln Steffens published Ames's story in "The Shame of Minneapolis" in 1903. The gangster Kid Cann engaged in bribery and intimidation between the 1920s and the 1940s.

During the early 20th century, bigotry presented in several ways. In 1910, a Minneapolis developer wrote restrictive covenants based on race and ethnicity into his deeds. Other developers copied the practice, preventing Asian and African Americans from owning or leasing certain properties. Though such language was prohibited by state law in 1953 and by the federal Fair Housing Act of 1968, restrictive covenants against minorities remained in many Minneapolis deeds as recently as 2021, when the city gave residents a means to remove them. The Ku Klux Klan entered family life but was only effectively a force in the city from 1921 until 1923. After Minnesota passed a eugenics law in 1925, the proprietors of Eitel Hospital sterilized about 1,000 people at Faribault State Hospital. From the end of World War I in 1918 until 1950, antisemitism was commonplace in Minneapolis—Carey McWilliams called the city the anti-Semitic capital of the United States. A hate group called the Silver Legion of America held meetings in the city from 1936 to 1938. In 1948, Mount Sinai Hospital opened as the city's first hospital to employ members of minority races and religions.

Minneapolis has a long history of structural racism and has some of the United States' largest racial disparities in housing, income, health care, and education. Some historians have said at various times, some White Minneapolitans have used discrimination based on race against the city's non-White residents. As White settlers displaced the indigenous population during the 19th century, they claimed the city's land. In 1910, when less than one percent of Minneapolis residents were non-White, the city was fairly well integrated. Discrimination increased when flour milling moved to the east coast and the economy declined. By the 1950s, still less than two percent of the city's population was non-White. Commentators have written about historic racism and socioeconomic disparities in Minneapolis. Kirsten Delegard of Mapping Prejudice explained that disparities today evolved from White people asserting control of the city's land. William D. Green of Augsburg University said in Minneapolis, people of different races live in parallel universes.

During the financial downturn of the Great Depression, the violent Teamsters Strike of 1934 led to laws acknowledging workers' rights. Mayor Hubert Humphrey helped the city establish fair employment practices and by 1946, a human-relations council that interceded on behalf of minorities was established. In 1966 and 1967, years of significant turmoil across the US, suppressed anger among the Black population was released in two disturbances on Plymouth Avenue. A coalition reached a peaceful outcome but failed to solve Black poverty and unemployment; Charles Stenvig, a law-and-order candidate, became mayor. Minneapolis contended with White supremacy, participated in desegregation and engaged with the civil rights movement; in 1968, the American Indian Movement was founded in Minneapolis.

Between 1958 and 1963, as part of urban renewal in America, Minneapolis demolished roughly 40 percent of downtown, including the Gateway District and its significant architecture, such as the Metropolitan Building. Efforts to save the building failed but encouraged interest in historic preservation.

On May 25, 2020, a citizen recorded the murder of George Floyd, an African-American man who suffocated when Derek Chauvin, a White Minneapolis police officer, knelt on Floyd's neck and back for more than nine minutes. The incident sparked national unrest, riots and mass protests. Local protests and riots resulted in extraordinary levels of property damage in Minneapolis; the destruction including a police station that demonstrators overran and set on fire. The Twin Cities experienced prolonged unrest over racial injustice from 2020 to 2022.

The history and economic growth of Minneapolis are linked to water, the city's defining physical characteristic. Long periods of glaciation and interglacial melt carved several riverbeds through what is now Minneapolis. During the last glacial period, around 10,000 years ago, ice buried in these ancient river channels melted, resulting in basins that filled with water to become the lakes of Minneapolis. Meltwater from Lake Agassiz fed the glacial River Warren, which created a large waterfall that eroded upriver past the confluence of the Mississippi River, where it left a 75-foot (23 m) drop in the Mississippi. This site is located in what is now downtown Saint Paul. The new waterfall, later called Saint Anthony Falls, in turn eroded up the Mississippi about eight miles (13 km) to its present location, carving the Mississippi River gorge as it moved upstream. Minnehaha Falls also developed during this period via similar processes.

Minneapolis is sited above an artesian aquifer and on flat terrain. Minneapolis has a total area of 59 square miles (152.8 km2), six percent of which is covered by water. Water supply is managed by four watershed districts that correspond with the Mississippi and the city's three creeks. The city has thirteen lakes, three large ponds, and five unnamed wetlands.

A 1959 report by the U.S. Soil Conservation Service listed Minneapolis's elevation above mean sea level as 830 feet (250 m). The city's lowest elevation of 687 feet (209 m) above sea level is near the confluence of Minnehaha Creek with the Mississippi River. Sources disagree on the exact location and elevation of the city's highest point, which is cited as being between 965 and 985 feet (294 and 300 m) above sea level.

Minneapolis is divided into eleven communities, each containing several neighborhoods, of which there are 83. In some cases, two or more neighborhoods act together under one organization. Some areas are known by nicknames of business associations.

In 2018, Minneapolis City Council voted to approve the Minneapolis 2040 Comprehensive Plan, which resulted in a city-wide end to single-family zoning. Minneapolis was the first major city in the United States to make this change. At the time, 70 percent of residential land was zoned for detached, single-family homes, however many of those areas had "nonconforming" buildings with more housing units. City leaders sought to increase the supply of housing so more neighborhoods would be affordable and to decrease the effects single-family zoning had caused on racial disparities and segregation. The Brookings Institution called it "a relatively rare example of success for the YIMBY agenda". A Hennepin County District Court judge blocked the city from enforcing the plan because it lacked an overall environmental review. Arguing it will evaluate projects on an individual basis, as of July 2022, the city is allowed to use the plan while an appeal is pending.

Minneapolis experiences a hot-summer humid continental climate (Dfa in the Köppen climate classification), that is typical of southern parts of the Upper Midwest, and is situated in USDA plant hardiness zone 4b; small enclaves of Minneapolis are classified as zone 5a. Minneapolis has cold, snowy winters and hot, humid summers, as is typical in a continental climate. The difference between average temperatures in the coldest winter month and the warmest summer month is 58.1 °F (32.3 °C).

According to the NOAA, the annual average for sunshine duration is 58%. Minneapolis experiences a full range of precipitation and related weather events, including snow, sleet, ice, rain, thunderstorms, and fog. The highest recorded temperature is 108 °F (42 °C) in July 1936 while the lowest is −41 °F (−41 °C) in January 1888. The snowiest winter on record was 1983–84, when 98.6 inches (250 cm) of snow fell: the least-snowiest winter was 1890–91, when 11.1 inches (28 cm) fell.

Dakota tribes, mostly the Mdewakanton, permanently occupied the present-day site of Minneapolis near their sacred site, St. Anthony Falls. During the 1850s and 1860s, European and Euro-American settlers from New England, New York, Bohemia and Canada, and, during the mid-1860s, immigrants from Finland, Sweden, Norway and Denmark moved to the Minneapolis area, as did migrant workers from Mexico and Latin America. Other migrants came from Germany, Poland, Italy, and Greece. Central European migrants settled in the Northeast neighborhood, which is still known for its Czech and Polish cultural heritage. Jews from Central and Eastern Europe, and Russia began arriving in the 1880s, and settled primarily on the north side before moving to western suburbs in the 1950s and 1960s.

For a short period of the 1940s, Japanese and Japanese Americans resided in Minneapolis due to US-government relocations, as did Native Americans during the 1950s. In 2013, Asians were the state's fastest-growing population. Chinese, Japanese, Filipinos, Hmong, Lao, Cambodians and Vietnamese arrived in the 1970s and 1980s, and people from Tibet, Burma and Thailand came in the 1990s and 2000s. The population of people from India doubled by 2010. After the Rust Belt economy declined during the early 1980s, Minnesota's Black population, a large fraction of whom arrived from cities such as Chicago and Gary, Indiana, nearly tripled in less than twenty years. Black migrants were drawn to Minneapolis and the Greater Twin Cities by its abundance of jobs, good schools, and relatively safe neighborhoods. Beginning in the 1990s, a sizable Latin American population arrived, along with immigrants from the Horn of Africa, especially Somalia; however, immigration of 1,400 Somalis in 2016 slowed to 48 in 2018 under President Trump. As of 2019, more than 20,000 Somalis live in Minneapolis. In 2015, the Brookings Institution characterized Minneapolis as a re-emerging immigrant gateway where about 10 percent of residents were born outside the US. As of 2019, African Americans make up about one fifth of the city's population.

The population of Minneapolis grew until 1950, when the census peaked at 521,718—the only time it has exceeded a half million. The population then declined for decades; after World War II, people moved to the suburbs, and generally out of the Midwest.

In 2015, Gallup reported the Twin Cities had an estimated LGBT+ adult population of 3.6%, roughly the same as the national average, and had the 38th-highest number of LGBT+ residents of the 50 largest metropolitan areas in the US. Human Rights Campaign gave Minneapolis its highest-possible score in 2019.

A 2015 report found racial and ethnic minorities in the city were unequal in education, with 15 percent of Blacks and 13 percent of Hispanics holding bachelor's degrees compared with 42 percent of the White population. While the standard of living is rising with incomes among the highest in the Midwest, in 2015, the median household income among minorities was below that of Whites by over $17,000 and the poverty-rate gap between Blacks and Whites was the widest in the US.[failed verification] A 2020 study found little change in economic racial inequality, with Minnesota ranking above only the neighboring state Wisconsin, and equal to the states of Iowa, Louisiana, and New Mexico.

The indigenous Dakota people, the original inhabitants of the Minneapolis area, believed in the Great Spirit and were surprised not all European settlers were religious. More than 50 denominations and religions are present in Minneapolis; a majority of the city's population are Christian. Settlers who arrived from New England were for the most part Protestants, Quakers, and Universalists. The oldest continuously used church, Our Lady of Lourdes Catholic Church, was built in 1856 by Universalists and soon afterward was acquired by a French Catholic congregation. The first Jewish congregation was formed in 1878 as Shaarai Tov, and built Temple Israel in 1928. St. Mary's Orthodox Cathedral was founded in 1887; it opened a missionary school and created the first Russian Orthodox seminary in the US. Edwin Hawley Hewitt designed St. Mark's Episcopal Cathedral and Hennepin Avenue United Methodist Church, both of which are located south of downtown. The Basilica of Saint Mary, the first basilica in the US and co-cathedral of the Roman Catholic Archdiocese of Saint Paul and Minneapolis, was named by Pope Pius XI in 1926.

By 1959, Temple of Islam was located in north Minneapolis, and the Islamic Center of Minnesota was established in 1965. The city's first mosque was built in 1967. Somalis who live in Minneapolis are primarily Sunni Muslim. In 1971, a reported 150 persons attended classes at a Hindu temple near the university. In 1972, a relief agency resettled the first Shi'a Muslim family from Uganda in the Twin Cities. The city has about 20 Buddhist centers and meditation centers. Minneapolis has a body of Ordo Templi Orientis.

The Billy Graham Evangelistic Association was headquartered in Minneapolis from the late 1940s until the early 2000s. Jim Bakker and Tammy Faye met while attending Pentecostal North Central University, and began a television ministry that by the 1980s reached 13.5 million households. As of 2012, Mount Olivet Lutheran Church in southwest Minneapolis was the nation's second-largest Lutheran congregation, with about 6,000 attendees.
Christ Church Lutheran in the Longfellow neighborhood, the final work in the career of Eliel Saarinen, has an education building designed by his son Eero Saarinen.

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