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The city hosts numerous foreign embassies as well as international missions in the country.

La Paz is an important political, administrative, economic, and sports center of Bolivia; it generates 25% of Bolivia's Gross Domestic Product and serves as the headquarters for numerous Bolivian companies and industries.

Originally it was to be at the site of the Native American settlement, Laja, with the full name of the city being Nuestra Señora de La Paz (meaning Our Lady of Peace).

The name commemorated the restoration of peace following the insurrection of Gonzalo Pizarro and fellow conquistadors four years earlier against Blasco Núñez Vela, the first viceroy of Peru.

This uprising formally marked the beginning of the liberation of South America from Spain.Indigenous and other unrest was repeated around the turn of the nineteenth century.In 1781, for a total of six months, a group of Aymara people laid siege to La Paz.In 1781, the indigenous leader and independence activist Túpac Katari laid siege to the city for a total of six months, but was finally defeated.On July 16, 1809 the Bolivian patriot Pedro Domingo Murillo ignited a revolution for independence, marking the beginning of the Spanish American Wars of Independence, which gained the freedom of South American states in 1821.

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As the seat of the government of Bolivia, La Paz is the site of the Palacio Quemado, the Presidential Palace and seat of the Bolivian executive power, the Plurinational Legislative Assembly, and numerous government departments and agencies.

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