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The first findings of human inhabitance in Meganisi date back to the Neolithic Age. Meganisi was known as Taphos in ancient times. This name was taken from Taphos, who was the son of Poseidon and ruler of the region. Taphos ruled his subjects with wisdom, followed by his son Mentes. According to some Latin writers, the ancient island of Capria, the modern island of Capri in Italy, used to be the colony of the Taphians. The history of Meganisi had always been connected with the neighboring Lefkada from the ancient times up to the present. From the 7th century BC until the Roman conquest in 197 BC, Meganisi was a Corinthian colony.
After the fall of Constantinople in 1204 to the Crusaders, the island was given to the Venetians, but soon it was included into the dominion of Epirus. The island came into the hands of the French in the year 1294 until 1479. Until the return of the Venetians in 1684, Meganisi along with Lefkada was into the hands of the Turks. The islands passed on to the hands of the French in the year 1797. A year later, the island fell under the Turkish-Russian rule. From 1800 to 1807, the Eptanesian State was established. While Meganisi was always the refuge of rebels, fugitives, and thieves, its people wanted more democratic rights.
In 1821, during the Greek Revolution, Meganisi fought under the guidance of a very powerful leader, Demos Tselios. After the end of the British occupation, Meganisi and the rest of the Ionian islands were united to Greece on 21st of May 1864. In the Second World War, the island was under the Italian occupation and many of its inhabitants went to the mainland of Greece to fight the enemies. In the 1950s, many of its inhabitants migrated abroad to search for a better life. Today most of the inhabitants in Meganisi occupy with tourism, fishing, and agriculture.