[2] Originally Chonchi was a Jesuit mission station with a school which had 150 pupils in 1755, and the town itself was founded in 1767 by order of Don Guil y Gonzaga, the Governor of Chiloé.

A good anchorage made Chonchi a natural stopping place for traffic in the canals and timber exploitation transformed it into a hub for development of the region.

[9] As a commune, Chonchi is a third-level administrative division of Chile administered by a municipal council, headed by an alcalde who is directly elected every four years.

[1] Within the electoral divisions of Chile, Chonchi is represented in the Chamber of Deputies by Gabriel Ascencio (PDC) and Alejandro Santana (RN) as part of the 58th electoral district, together with Castro, Ancud, Quemchi, Dalcahue, Curaco de Vélez, Quinchao, Puqueldón, Queilén, Quellón, Chaitén, Hualaihué, Futaleufú and Palena.

The commune is represented in the Senate by Camilo Escalona Medina (PS) and Carlos Kuschel Silva (RN) as part of the 17th senatorial constituency (Los Lagos Region).