Political map of South American nations 22 March 1866 (Chincha Islands War): In 1864 Spain occupied Peru's Chincha Islands following a diplomatic dispute between the two countries. Spain's increased presence in the Pacific antagonized Chile, which declared war the following year, and an alliance of four South American nations soon formed against the Spanish (Chincha Islands War). Unwilling to push things further, Spain withdrew from the region in May 1866.