The Pre-Encomienda System of Paraguay.

The villages of the Guarani Indians in Paraguay were comprised of large thatched communal buildings that contained several families of one patrilineal lineage where each unit contained its own leader or chief. The chiefs power was limited compared to other colonial Latin American hierarchal systems because Guarani society was not class structured where a chief would have authority over several widespread villages. The Guarani society was important in determining what kind of control system the Spanish would later implement because they could not simply replace the Guarani chiefs in order to gain widespread control. The encomienda system was not immediately set up because the Spaniards initially did not establish the fort at Asuncion in order to conquer the Indians in the region. Rather than set up a permanent establishment, the Spaniards established a fort there because they hoped to find gold, silver, and groups of Indians with treasures.

Originally, the fort at Asuncion was repeatedly threatened by large numbers of war-driven indigenous tribes of the Chaco region and because the Guarani were under the same circumstances with the Chaco tribes they welcomed the Spaniards as allies to combat these war-driven tribes. The Spaniards formed an alliance with Guarani chiefs that allowed them to build their fort which became the headquarters for exploration and future conquest in the Paraguay region. Once the Spaniards were finally settled in the area they took great care not to "violate the customs or wound the sensibilities of the Guarani." (pg233) Because they were looking for riches rather than trying to establish a settlement the Spaniards acquired large numbers of Guarani women to serve as wives, concubines, servants, and food providers. The women also provided labor for the Spanish in the same fashion they provided for the Guarani chiefs. The men of the Guarani tribes carried out numerous military expeditions under Spanish leadership in order to combat against the constant threat of the war-driven Chaco tribes of the region. In 1556, after several years of searching for riches and treasures the Spanish set up the encomienda system in accordance with crown order which led to rapid establishments of settlements throughout Paraguay by the Spanish and Guarani people.

Service, Elman R.. "The Encomienda in Paraguay." The Hispanic American Historical Review 31, no. 2 (1951): 230-252