Panarea was already inhabited in prehistoric times, as shown by the Bronze Age village dating back to the 14th century BC on the promontory of Punta Milazzese, in the south-west part of the island. The particular position of the plateau, stretching out towards the sea and protected by high cliff walls – therefore easily defensible – made it an ideal place for the settlement.
In the village, of which the remains of around twenty huts can be seen and visited, materials of Mycenaean origin were found, testifying to the role played, even in ancient times, by the Aeolian archipelago at the centre of the main Mediterranean trade routes.
Otherwise, Panarea shares the history of the other Aeolian Islands, Lipari in particular.
Inhabited since Neolithic times, in the period between the 7th and 6th centuries BC, the islands were prey to continuous raids by the Etruscans, until the Greek colonisation. In 264 BC, Lipari allied itself with the Carthaginians and the islands were subjected to continuous attacks by the Roman fleet.
In 252 BC, Lipari and its islands fell under Roman rule. This is also shown by the remains of a Roman villa, built on top of the highly inaccessible isle of Basiluzzo, owned by an eccentric Roman landowner. Evidently, the owner was a lover of the harshness and beauty of Panarea’s landscapes.
With the fall of the Roman Empire, a period of decline began that worsened with the Byzantine rule and even more so with the beginning of the Arab occupation between 827 and 1061.
With the advent of the Normans, the economic and demographic development of the islands began again. In the mid-1500s, the Muslims began to threaten the islands again; traces of this remain in the island’s names of the bay and its district of Drautto, named after the pirate Draugh.
Due to Turkish pirate raids, the island remained almost uninhabited; in fact, there were no more than one hundred inhabitants. Towards the end of the 17th century, the farmers of Lipari began to cultivate it again, but women and children were not brought there because of the danger of pirate raids. It is significant how, above the prehistoric village of Cala Junco, there is the “Castello del Salvamento”, which in Aeolian naming, the name “castello” (castle) means a rocky pinnacle of considerable height. It was used as a divine refuge for the inhabitants during these raids.
Later, with the improvement of the political situation on the islands, the population of Panarea increased to around one thousand people. But at the end of the 19th century it fell again due to emigration to the United States, South America and Australia.
Nowadays it has around 200 permanent inhabitants during the winter period, increasing during the summer season.