Amsterdam,
capital city of the
Netherlands, lies on the banks of two bodies of water, the
IJ bay and the
Amstel river. Founded in the late
12th century as a small fishing village on the banks of the
Amstel, it is now the largest city in the country and is a financial and cultural centre. In 2006, the population of the municipality proper was 741,329; the population of the official Greater Amsterdam area is approximately 1.5 million, but the real agglomeration is estimated at 2 to 2.5 million. Amsterdam is also one of the core urban centres of the greater metropolitan area called
Randstad (English: "Ring City") which encompasses other Dutch cities and has a population of over 7.5 million.
Amsterdam has one of the largest historic city centres in Europe, dating largely from the 17th century. At this time, a series of concentric, semi-circular canals ( grachten) were dug around the old city centre. Along the canals houses and warehouses were built. The canals still define Amsterdam's layout and appearance today. Amsterdam is famous for its free-spirited liberalism, diversity and tolerance.