[3][7] It is a longstanding political center, and is located at approximately equal distances from the Southern Carpathians (north) and the River Danube (south).

The city prospered as a regional trading centre despite an earthquake in 1790, a plague in 1795, and a Turkish assault in 1802 during which it was burned.

In 1395 Craiova was probably the scene of a victory won by the Wallachian Prince Mircea I of Wallachia over Bayezid I, Sultan of the Ottomans (see Battle of Rovine).

[citation needed] Frequently referred to as "a city" after the first half of the 16th century, the Craiova area was always regarded as an important economic region of Wallachia and Romania at large.

Under Prince Emanuel Giani Ruset, Wallachia's seat was moved to Craiova (1770–1771), viewed as a place of refuge during the Russo-Turkish War of 1768–1774.

During the Wallachian uprising of 1821, inhabitants of the present-day Dolj County joined Tudor Vladimirescu's Pandurs in great numbers, contributing to the expedition on Bucharest.

During the first two decades of the 19th century, Craiova witnessed economic prosperity, centered on handicraft trades and public services.

During Imperial Russian occupation and the early stages of Organic Statute rules (1828–1834), the city increased its economic output; in 1832 there were 595 shops, 197 of which were made barracks and 398 were houses built of brick.

At the time, Craiova exported wheat, furs, leather, live animals and other products into the Austrian and Ottoman Empires.

On October 26, 1896, the Craiova power station entered service (with AEG equipment working at 310 CP, supplying 365 streetlights on 39 streets, forming a 30 km-long network); Craiova was the first city in the country to be supplied with electric power by internal combustion engines.

The construction of housing estates also begins at this time, with Brazda lui Novac being one of the first in 1967–1968, followed by Siloz-Valea Roșie in the same years.

Industry, although affected by economic changes, remains an important branch, representing circa 70% of Craiova's output.

This results in a combination of occasional cold winters, but too mild of a climate to contain permanent snow cover, along with long and hot summers.

As a consequence of the permanent high demand for exports, Craiova was the site of the first Romanian society for shares in cereal shipping on the Danube to Brăila, established in 1846.

Towards the end of the 19th century, the city of Craiova had small factories and workshops with chemical products, agricultural machines, graphic design, tanneries, textiles, construction materials, among others.

On 26 October 1896, Craiova's power plant (using AEG equipment) began operations, supplying 365 lamps on 39 streets in a 30 km (18.64 mi) network.

The Romanian Revolution of 1989 led to important changes in the economy, with the introduction of a free market and decentralization of the management of all national economic sectors.

The tram was first introduced in 1987, on an 18.4 km (11.43 mi) double-track line, as a result of the state's intention of keeping energy consumption low.