Situated at the confluence of the Ribnica and Moraca rivers on the Zeta plain, Podgorica was a lively trading centre already in the Middle Ages. In 1474, it was occupied by the Ottomans, who turned it into their main bastion against the Montenegrin tribes. It was only incorporated into Montenegro in 1878, after the Congress of Berlin.
Heavy bombing during the Second World War almost completely destroyed the town, which at the time numbered some 13,000 inhabitants. After the war, Podgorica became the capital of the Socialist Republic of Montenegro, the smallest of the six republics constituting the Socialist Federal Republic of Yugoslavia. In 1946, the city received the honour of being renamed "Titograd" after the Yugoslav leader, a name it kept until 1992. (In international aviation, the code for Podgorica's airport is still "TGD").
Socialism not only brought a new name, but the rebuilding of the town. Apartment buildings appeared, along with new administrative buildings and – in the early 1970s – a university. The huge aluminium plant at the outskirts of the town became Montenegro's biggest company, employing at its height some 4,000 workers and producing more than 20 percent of the republic's total output.
The city has grown continuously, from 20,000 inhabitants in 1953 to 62,000 in 1971, only to double again in the following 30 years to reach 136,000 in 2003.
While numerous other socialist companies ceased to operate in the 1990s, the aluminium plant was privatised and is still today Montenegro's biggest company. Another huge company that has survived profitably is "AD Plantaze", a huge vineyard stretching from the suburbs of Podgorica to Lake Shkodra that forms the border with Albania.
However, Podgorica's economy is not driven by industry, but by services. Podgorica is Montenegro's undisputed administrative, financing, trading and university centre. According to "Lonely Planet", Podgorica is "Montenegro's most unattractive spot". However, economic growth and investments are beginning to transform Europe's youngest capital.
A new "Millenium bridge" over the Moraca river was opened in 2005. A new airport followed in May 2006. Numerous modern apartment buildings have sprung up, transforming the city's socialist suburbs. A pedestrian area was constructed, and the main square completely redesigned.