Factory (trading post)

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Factory was the common name during the medieval and early modern eras for an entrepôt – which was essentially an early form of free-trade zone or transshipment point. At a factory, local inhabitants could interact with foreign merchants, often known as factors.^[1] First established in Europe, factories eventually spread to many other parts of the world. The origin of the word factory is from Latin factorium 'place of doers, makers' (Portuguese: feitoria; Dutch: factorij; French: factorerie, comptoir).

The factories established by European states in Africa, Asia and the Americas from the 15th century onward also tended to be official political dependencies of those states. These have been seen, in retrospect, as the precursors of colonial expansion.

A factory could serve simultaneously as market, warehouse, customs, defense and support to navigation and exploration, headquarters or de facto government of local communities.

In North America, Europeans began to trade with Natives during the 16th century. Colonists created factories, also known as trading posts, at which furs could be traded, in Native American territory.