Valdivia retired with his chaplain to a convenient spot, and having received absolution, prepared himself for death. He was soon taken prisoner, and his late page, begging that he might be spared, was on the point of obtaining his release, when an old Ulmen, indignant at the fate of his countrymen who had fallen in the battle, put an end to the conference, and the existence of Valdivia by a blow with his war-club.
On the news of the defeat and death of the governor arriving at Concepcion, Villagran was appointed to the chief command, and marching with a force against the Araucanians, he was defeated by Lautaro, the page before mentioned, and losing 700 men, was forced to retreat to Concepcion, which place he abandoned and proceeded to St. Jago. By his wise measures and resolute conduct, as well as by the dreadful ravages of the small-pox which had been communicated to the Araucanians, the Spanish possessions were once more established, but battles were constantly fought between the natives and the settlers, which though they generally terminated in favour of the Europeans, were the means of their losing many settlements, and Lautaro the toqui, was slain in 1556, in an action with Villagran.
In 1557, the viceroy of Peru sent Don Garcia Hurtado de Mendoza his son to Chili, with a great force of cavalry, infantry and shipping. The new governor landed on an island in the bay of Concepcion in April; here he remained during the winter, making overtures of an amicable nature to the Araucanians, but not receiving a determinate answer, he landed 150 men at Monte Pinto, and erected a strong fort to command the harbour; this place was immediately attacked by the Araucanians, under Caupolican, when a tremendous battle ensued, in which the army of the toqui were defeated.
Don Garcia then proceeded into Arauco, where he fought another desperate action, and defeating the Araucanians, marched to the southward, through the province of the Cunches, a tribe hitherto unsubdued. In this expedition, they discovered the Chiloe Islands, and returning from thence, he marched through the country of the Huilliches, and founded the town of Osorno.
About this time, Caupolican the great toqui or general, was taken prisoner, impaled, and shot to death with arrows, but his son was elected to the chief command, and exasperated by the cruel death of his father, attacked the Spanish forces under the officer who had slain Caupolican; in this attack, the young chief was victorious, and immediately besieged Imperial, in which he was however foiled.
Many battles occurred in 1559, the last of which was peculiarly favourable for the Spanish cause, all the best leaders of the Araucanians being slain in it.
Don Garcia now rebuilt the cities which had been destroyed; sent Castillo to conquer Cuyo, and at last, embarked for Peru, in which country he had been advanced to the viceregal rank.
Villagran who had been to Spain returned to Chili, with the title of governor, but meeting with reverses, his spirits sunk, and dying soon after, he left his son Pedro as governor; at which period, the Araucanians were once more getting the better of the Spaniards, who founded the town of Castro, in Chiloe, in the year 1566.
In 1567, the court of royal audience was established in the city of Concepcion, their first act was to depose Quiroga, who had dispossessed the younger Villagran in his government, and to appoint Ruiz Gamboa, to the command of the army.
The natives had now become exceedingly powerful under the conduct of a Mestizo, named Alonzo Diaz, who had been raised to the rank of toqui by the name of Paynenauca, and who had been joined by the Chiquillanians and the Pehuenches. This chief fought many actions with the Spanish troops, but was at last taken prisoner and beheaded.