<P> The recorded history of Austin, Texas, began in the 1830s when Anglo - American settlers arrived in Central Texas . In 1837 settlers founded the village of Waterloo on the banks of the Colorado River, the first permanent settlement in the area . By 1839, Waterloo would adopt the name Austin and become the capital of the Republic of Texas . </P> <P> Austin's history has also been largely tied to state politics and in the late 19th century, the establishment of the University of Texas made Austin a regional center for higher education, as well as a hub for state government . In the 20th century, Austin's music scene had earned the city the nickname "Live Music Capital of the World ." With a population of over 800,000 inhabitants in 2010, Austin is experiencing a population boom . During the 2000s (decade) Austin was the third fastest - growing large city in the nation . </P>

When did austin become the capital of texas