The natives of Arakan trace their history as far back as 2666 B.C., and give a lineal succession of 227 native princes down to modern times. According to them, their empire had at one period far wider limits, and extended over Ava, part of China, and a portion of Bengal. This extension of their empire is not, however, corroborated by known facts in history. According to recorded history, a kingdom called Dhanyawadi arose in the Arakan region in the 1st century AD. The famous Mahamuni Buddha (located in Mandalay) was cast in Dhanyawady in around 150 AD. The kingdom of Waithali (Rakhine: Wai-tha-li) was the successor to Dhanyawady from the 3rd century AD.
Arakan reached the zenith of its power in the Bay of Bengal during the Waithali (Vesali), Lemro and Mrauk U periods, but the country steadily declined from the seventeenth century onwards. Chittagong, which was part of Arakan, was invaded and occupied by the Mughal Empire in 1666. Internal instability and dethroning of kings was very common. The Portuguese, during the era of their greatness in Asia, gained a temporary establishment in Arakan; but on December 28th 1784 the province was finally conquered by the Burmese. From that time to time, Arakanese have got colony under Burma controls.
The famous Mahamuni Buddha image was taken as a war trophy by Crown Prince Shwedaung, son of King Bodawphaya and Conqueror of Arakan in 1784, to his capital of Amarapura. (The image was relocated to Mandalay By King Mindon in 1853 when he relocated the capital to Mandalay). The Burmese, after conquering Arakan, came directly into contact with British interests in east India. Burmese seizures of Arakan's neighbouring states of Assam and Manipur and the assault on Shinmaphyu Isle, which was a British outpost in Bengal was the instigating causes of the First Anglo-Burmese War (1824 to 26). Under the Treaty of Yandabo (1826), Burma ceded Arakan and Tenasserim to British India. Arakan was thus one of the first Burmese territories to be ceded to the British. The British made Akyab capital of Arakan, and retained the traditional divisions of the country into the districts of Akyab, Kyaukpyu and Sandoway (Ramree) with a district officer in charge of each. Akyab district originally included the Arakan Hill Tracts, which were detached 1865 and made into a separate district (and which is now Chin State), and also another two of towns to (Irrawady).
With independence and the formation of the Union of Burma (now Myanmar) in 1948, the three districts became Arakan Division, on equal footing with the majority Burmese administrative divisions.
From the 1950s, there was a growing movement for secession and restoration of Rakhine independence. In part to appease this sentiment, in 1974, the Burmese government of Ne Win constituted Rakhine State from Arakan Division giving at least nominal acknowledgment of the majority Rakhine ethnic group.