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The original inhabitants in the area first moved in in search of food, fibre and stone resources. They hunted the large, flightless moa and they discovered sources of pounamu (greenstone) at the head of Lake Wakatipu. Expeditions into the area continued up until the middle of the 19th century, but permanent settlement was generally limited to seasonal occupation. A few groups stayed two or three years before returning to the coast.
The Maori overlanders eventually settled down from a nomadic life and the area began to grow. After English settlers had begun to move in, the area started to grow as the population increased yearly.
In 1860 William Gilbert Rees and Nicholas Von Tunzelman came to the area to develop its pastoral potential. They burned much of the beech forest and shrubland to open up grazing land. Later, trees such as Douglas fir, larch, sycamore, willow and poplar were planted to "enhance" the "barren" landscape. Fir has been favoured by local conditions and is now rapidly invading the alpine tussock lands. Today, wilding tree control is necessary to protect the natural landscape.
Thomas Low and John MacGregor discovered gold in the Arrow, which led to other discoveries in the Shotover in 1862. The goldrush peaked in 1863 with the pastoral lease of W.G. Rees being cancelled and a goldfield declared for which he received £10,000 compensation. But by 1865, the Westland goldrush had begun and this saw an exodus of miners, which left two-thirds of the buildings in Queenstown vacant.
Advancements in mining methods led to quartz crushing and by the 1870s gold was being mined from the quartz reefs of Macetown, Mt Aurum and the Shotover River. Up to this point, mining had been of the alluvial deposits. The 1930s saw another revival of gold mining as a result of hardships of the Depression. Modern mining has seen the use of heavy machinery.
There are numerous stories of how the town was named, the most popular suggesting that a local gold digger exclaimed that the town was "fit for Queen Victoria".
Today, Queenstown is still growing, but is not a city (yet!), it has a permanant population of about 20,000.