Folklore claims that seaman have been stranded on islands in the Indian Ocean throughout history. The Islands of the British Indian Ocean Territory were originally French colonies. The first settlers were slaves on the coconut plantations that were established there. The territory was transferred to the British in the Treaty of Paris in 1810. They were severed from the Seychelles in 1965.

The British Indian Ocean Territory has no native peoples; its indigenous culture is that of its colonizers. The largest island, Diego Garcia, is home to about 4,000 people from the United Kingdom and the United States. Most of these people are either in the military or are government contractors.

In 1971 the United States signed a treaty with the United Kingdom that allowed the US to build a military base on Diego Garcia. Since the island is in the Indian Ocean, and therefore near Russia, it was a good strategic move for the US to arrange to have a military presence there. In return, the US gave the UK some nuclear missiles for a discounted price.

No one lives on any of the other islands in the territory. When the military base was being built on Diego Garcia, all of the people living there were moved to the island of Mauritius, another territory that came into British possession after being a French colony. These people are called the Chagossians, and they have tried to sue for the right to move back to Diego Garcia, although rulings were not in their favor.

The British Indian Ocean Territory functions solely as a military base and thus is subject to the laws of the UK. It has no constitution or national holidays. It has a commissioner, Tony Crombie, and an administrator, Tony Humphries. Both live in England and were appointed by Queen Elizabeth II.