Prehistory and origin of Stockholm
According to the Chronicle of Eric, written in the 1320s, Stockholm was founded by Birger Jarl around 1250 as a lock to the Lake Mälaren region ("laas fore then sio", "lock before that lake") in order to prevent pirates from reaching the seven cities and nineteen parishes around it. Another medieval source ("Visbyannalerna"), however, claims the city was founded in 1187 following a pagan pillaged the city of Sigtuna, and as there was an "Earl" named Birger around at that time too, the disputed origin of the city are likely to remain obscure and some historians choose a diplomatic interpretation saying there was some sort of fortification around by the mouth of lake Mälaren when the city was founded during the second half of the 13th century. As Snorri mentions no city in his account but some sort of fortification called a "kastali" (in various manuscripts curiously said to be located east and west of "Stocksund"), it has generally been assumed this fortification eventually developed into the castle Tre Kronor located where still is the Stockholm Palace.
Stockholm Municipality
When the first local government acts came into force in Sweden in 1863, Stockholm was one of the then 89 cities of Sweden. A first City Council was elected. The area roughly corresponded with today's "Innerstaden". Large areas were annexed in 1913, 1916 and 1949. The city was outside Stockholm County until 1968, having its own governor. The local government reform of 1971 made Stockholm a unitary municipality like all others in the country.