Over 1.5 million residents of Arunachal Pradesh belong to the five Tani tribes (Nyishi, Adi, Galo, Apatani, Tagin) supposedly descended from Abotani. The history of the Tani people is found in the ancient libraries of Tibet as the Tani people traded swords and other metals to Tibetans in exchange for meat and wool. Tibetans referred to the Tani people as the Lhobhas; lho means south and bha means people. The Monpa and Sherdukpen keep historical records of the existence of local chiefdoms in the northwest as well. Northwestern parts of this area came under the control of the Monpa kingdom of Monyul, which flourished between 500 B.C. and 600 A.D. The remaining parts of the state, especially Southern and those bordering Myanmar, were under the control of the Chutiya Kings.
Recent excavations of ruins of Hindu temples, such as the 14th century Malinithan at the foot of the Siang hills in West Siang, indicate they were built during the Chutiya reign. Another notable heritage site, Bhismaknagar (built in 8th century), has led to suggestions that the Chutiya people had an advanced culture and administration. The third heritage site, the 400-year-old Tawang Monastery in the extreme north-west of the state, provides some historical evidence of the Buddhist tribal people. The sixth Dalai Lama Tsangyang Gyatso was born in Tawang.
In 1912–13, the British Indian government made agreements with the indigenous peoples of the Himalayas of northeastern India to establish the North-East Frontier Agency from five tracts of frontier lands.
India became independent in 1947 and the People's Republic of China (PRC) was established in 1949. The new Chinese government still considered the McMahon Line invalid. In November 1950, the PRC was poised to take over Tibet by force, and India supported Tibet. Journalist Sudha Ramachandran argued that China claimed Tawang on behalf of Tibetans, though they did not claim Tawang is in Tibet.
What is now Arunachal Pradesh was established as the North-East Frontier Agency (NEFA) in 1954 and Sino-Indian relations were cordial until 1960. Resurgence of the border disagreement was a factor leading to the Sino-Indian War in 1962, during which China captured most of Arunachal Pradesh. However, China soon declared victory, withdrew back to the McMahon Line and returned Indian prisoners of war in 1963. The war resulted in the termination of barter trade with Tibet, although since 2007 the Indian government has shown signs of wanting to resume barter trade.
The North-East Frontier Agency was renamed as Arunachal Pradesh by Sri Bibhabasu Das Shastri, the Director of Research and K.A.A. Raja, the Chief Commissioner of Arunachal Pradesh on 20 January 1972, and it became a union territory. Arunachal Pradesh became a state on 20 February 1987.
In January 2007, the Dalai Lama said that both Britain and Tibet had recognised the McMahon Line in 1914. In 2008, he said that "Arunchal Pradesh was a part of India under the agreement signed by Tibetan and British representatives". According to the Dalai Lama, "In 1962 during the India-China war, the People's Liberation Army (PLA) occupied all these areas (Arunachal Pradesh) but they announced a unilateral ceasefire and withdrew, accepting the current international boundary". In recent years, China has occasionally asserted its claims on Tawang. India has rebutted these claims and informed the Chinese government that Tawang is an integral part of India. India reiterated this to China when the two prime ministers met in Thailand in October 2009. A report that the Chinese Army had briefly invaded Arunachal Pradesh in 2016 was denied by India's Minister of State for Home Affairs, Kiren Rijiju. In April 2017, China strongly objected to a visit to Tawang by the Dalai Lama, as it had to an earlier visit by the US ambassador to India. China had objected to the Dalai Lama's previous visits to the area.
Arunachal Pradesh has faced threats from insurgent groups, notably the National Socialist Council of Nagaland (NSCN), who are believed to have base camps in the districts of Changlang and Tirap. These groups seek to decrease the influence of Indian government in the region and merge part of Arunachal Pradesh into Nagaland.
The Indian army is present along the Tibetan border to thwart any Chinese incursion. Under the Foreigners (Protected Areas) Order 1958 (India), Inner Line Permits (ILPs) are required to enter Arunachal Pradesh through any of its checkgates on the border with Assam. China renamed six places in Arunachal Pradesh in 2017 and these new names have started to appear on Chinese maps.