Palta and Cañari
According to Spanish chroniclers and the data provided by their informants, in Pre-Hispanic times, the south of present-day Ecuador would have been occupied by two confederations of chiefdoms: the Palta (located in today's province of Loja and parts of the provinces of Morona and Zamora-Chinchipe) and the Cañari (actual provinces of Azuay and Cañar). Archaeological evidence relating to these areas and the study of the chroniclers' accounts (which, as many other written records, possess bias and errors, or were written second-hand or after events had taken place) make the task of historical reconstruction at best tentative, since it comes with a baggage of assumptions, guesses and speculations about a number of issues.
It is supposed that the Palta were an ethnic group linked to the Shuar, who might have moved from cloud forests in the Amazon basin to the Eastern Andean Cordillera of Ecuador. Spanning over a range of different ecological levels (as it continues to be done by societies that today inhabit the region, e.g. the Saraguro), the Palta would have manage to grow different crops (corn, beans, manioc, squashes, groundnuts and fruit). According to colonial documents, one of their most important urban settlements would have been Cuxibamba (allegedly from Quechua kusipampa, "happy/cheerful plain"). When Tupac Yupanqui's (Tupaq Yupanki) army, continuing the expansion of Tawantinsuyu (Inca Empire), invaded their territory, the Palta retreated to the heights of Saraguro attempting to resist the invasion. However, they soon discovered that they were outnumbered and hopelessly outclassed. They surrendered. Many of them were displaced as mitmaq or mitimaes (population sent into exile or moved as colonizers by the Incas, to faraway places within the Tawantinsuyu) to the Meseta del Collao; and their territory was in turn occupied by mitimaes displaced from present-day Peru. Even today, the Saraguro are not regarded as an indigenous people "native" to Ecuador, but as descending from peoples coming from different places within the "Inca Empire", what it is only a half truth.
In the chronicles of the time we are told that the Cañari created friendly alliances between neighbouring chiefdoms based on a common culture and trade, which resulted in the formation of a federation. Each chief ruled his own territory, which retained its own identity and was governed by its own law and customs; and some chiefdoms might wield more influence and power than others, in particular the Hatun Cañar (whose main settlement was where the town of Cañar is today) and the Shabalula (whose main settlement was where the town of Sigsig is today). However, in the face of a major disaster or war, chiefdoms will band together under the leadership of a chief chosen by themselves.
As many other societies in the Andean region, the Cañari would have been polygamous. According to evidence there were also matriarchal chiefdoms, however, in most cases, leadership was passed down to the eldest son. Ancient ruins found in their territory (e.g. Cañaribamba, Guapondelig, Cojitambo, Chobshi, Molleturo, Coyoctor, Culebrillas or Yacubiñay) indicate the use of circular dwellings; findings made at the site of Ingapirca have revealed both circular shaped Cañari and rectangular shaped Inca buildings. While at Shabalula it is possible to see retaining walls, fortresses, worship places and nearly a hundred stone houses.
Artefacts at burial sites include gold/silver/copper-smithing and pottery classified as Cashaloma and Tacalshapa styles. The Cañari language disappeared under the weight of the Quechua-speaking Inca (today, the indigenous group that identifies itself as Cañari speaks a dialect of northern Quechua or kichwa), but inevitably some of their words survived, and those remnants seem to be mostly places names.
After invading present-day Ecuadorian territory and taking control of the Palta chiefdom, Tupac Yupanqui's army advanced deep into Cañari territory. The Cañari had formed an alliance under the leadership of Duma, and at one time threw back Tupac Yupanqui's army to Saraguro, but in the end, they were forced to surrender. Then Tupac Yupanqui ordered to build fortresses, temples and other structures where the most important Cañari settlements had been founded; Tomebamba (Tumipampa, "plain of the knife"), for instance, was built on the ancient Guapondelig (where the city of Cuenca now stands). There, in Tomebamba, Tupac Yupanqui commanded to build the Pumapungo Palace (Pumapunku, "puma's door"), where later his son Huayna Cápac (Wayna Qhapaq) would be born. And the same fate was decreed for Molleturo, Cañaribamba, Ingapirca...
As happened to the nations who fell under the dominion of the Tawantinsuyu, the Palta and the Cañari suffered the imposition of the political, economic, cultural and ideological power exercised by the Inca. However, the Cañari maintained their determination to resist and, as a consequence, they were punished with displacement (mitimaes): many people were thus deported to become state labourers and their territory was occupied by colonizers sent from other parts of the "Empire".
During the civil war fought between the forces loyal to Huascar (Waskar) and the forces loyal to Atahualpa (Atawallpa), the two sons of Huayna Capac, over the control of the Empire, the Cañari sided with the former despite living in the latter's territory. After Atahualpa's victory over his brother, the Inqa inflicted a horrible punishment on the Cañari, they suffered a massacre that, according to Cieza de León's account, left one man alive for every five women. When Pizarro's forces arrived in Tumbes (Ecuador) in 1532, the subdued Cañari population joined them to fight against Atahualpa. In fact, Cañari troops took part, alongside the Spanish forces, in the battle of Sacsayhuamán (1536), and served as local guides, porters and guards. Yet, nothing changed for the Cañari after the Spanish victory over Atahualpa: the Inca authority was replaced by the authority of the king of Spain, and his representatives: the viceroy, the encomenderos (who were entitled to collect tribute from the Indians in return for providing for the protection and religious welfare of the Indians), and the priests and missionaries.