Zanzibar is the collective name for two islands in Tanzania: Unguja and Pemba. The capital of Zanzibar, located on the island of Unguja, is Zanzibar City. Although Zanzibar enjoys a high degree of autonomy, it is not a sovereign state: it remains part of Tanzania.

With a population of 981,754 (2002 census) and an area of 1,651 km² (637 mi²), Zanzibar's main industries are spices (which include cloves, nutmeg, cinnamon and pepper), raffia, and tourism. It is also the home of the endemic Zanzibar Red Colobus and the elusive Zanzibar Leopard. 

The word "Zanzibar" is still debatable. Some say it probably derives from the Persian زنگبار, Zangi-bar ("coast of the blacks"), while others say the name could also have been derived from the Arabic Zayn Z'al Barr ("fair is this land"). The word "Zanzibar" often refers to Unguja Island and is sometimes referred to as the "Spice Islands."  

Zanzibar has attracted many people including Assyrians, Egyptians, Phoenicians, Portuguese, Dutch and English. All these have landed on its coast for trade, adventure and exploration. 

Hadimu and Tumbatu, who began arriving from the East African mainland around AD 1000, were the first permanent residents of Zanzibar. They had belonged to various mainland ethnic groups, and on Zanzibar they lived in small villages and did not coalesce to form larger political units as they lacked central organization. Therefore, they were easily subjugated by outsiders. 

Ancient pottery demonstrates existing trade routes with Zanzibar as far back as the ancient Assyrians. Traders from Arabia, the Persian Gulf region of modern-day Iran (especially Shiraz), and west India probably visited Zanzibar as early as the 1st century. They used the monsoon winds to sail across the Indian Ocean and landed at the sheltered harbor located on the site of present-day Zanzibar Town.

The coastal people arrived in the 3^rd and 4^th Century from Cameroon and traded with the Arabs. This led to a language and culture called Swahili. Intermarriage led to the Swahili adopting the Arab customs and traditions first among the Islamic religion and later the Swahili people started trading with the Arabs and Persians.  

However, in the 15^thC, this came to a halt. Da Gama's visit in 1499 marks the beginning of European influence. The Portuguese established control over the island and in August 1505, it became part of the Portuguese Empire when Captain John (João) Homere of de Almeida's fleet captured the island and claimed it for Portugal. It remained a possession of Portugal until 1698 when Omanis gained possession of the region. 

In 1840, Sayyid Said bin Sultan al-Busaid moved his capital from Muscat in Oman to Stone Town and in 1856, after his death, his sons struggled over the succession. Zanzibar and Oman were divided into two separate principalities with Sayyid Majid bin Said Al-Busaid becoming the Sultan of Zanzibar, while his brother, the Sayyid Thuwaini bin Said al-Said, the Sultan of Oman. 

During this period, the Sultan of Zanzibar also controlled a substantial portion of the east African coast, known as Zanj, including Mombasa and Dar es Salaam. Trading routes extended much further into Africa, such as to Kindu on the Congo river. In November 1886, a German-British border commission established the Zanj as a ten-nautical mile (19 km) wide strip along the coast from Cape Delgado (now in Mozambique) to Kipini (now in Kenya) including all offshore islands and several towns in what is now Somalia. However, from 1887 to 1892, all of these mainland possessions were subsequently lost to the colonial.

The British Empire gradually took over, and Zanzibar and the British position was formalized by the 1890 Helgoland-Zanzibar Treaty. In this treaty, Germany pledged not to interfere with British interests in insular Zanzibar. 

On August 27, 1896, the Anglo-Zanzibar War broke out over the succession of Sultan Hamad bin Thuwaini and ended with the accession of British client Sultan Hamoud bin Mohammed. It was the shortest war in history. Zanzibar surrendered after 45 minutes. Agreeing to British demands, Hamoud brought an end to Zanzibar's role as a centre for the eastern slave trade that had begun under Omani rule by banning slavery and freeing the slaves of Zanzibar with compensation in 1897. 

Zanzibar received its independence from the United Kingdom as a constitutional monarchy under the Sultan on December 10, 1963. This state of affairs was short-lived, as the Sultan was overthrown on January 12, 1964, and on April 26, 1964, Zanzibar merged with the mainland state of Tanganyika to form Tanzania.

Reference:
http://en.wikipedia.org/wiki/Zanzibar
http://www.zanzibar-holiday.com/brief_history.html