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The Aeneid is set in the middle of the 12th century B.C. after the fall of Troy. Troy was in Asia Minor, in what is now Turkey. In Book II you see how Troy, which was a wealthy, fortified city filled with temples and palaces, is destroyed by the Greeks. The first six books of the Aeneid describe how Aeneas and a small band of Trojans are forced to flee Troy, They spend more than seven years sailing around the Mediterranean Sea in primitive wooden boats trying to find Italy. Finally, after many detours and disasters, they arrive on the west coast of Italy. (For a map of Aeneas's wanderings, see illustration.)
The Trojans land at the mouth of the Tiber, the same river that flows through present-day Rome. When the Trojans arrive, there are several small, simple cities (nothing like Troy) in the surrounding countryside, which is called Latium. At first the king of the biggest city, Laurentium, is willing to share his land with the Trojans, but soon his people rebel and band together with the people of the other cities to drive the Trojans away. The Trojans, led by Aeneas, battle them and finally succeed in capturing Laurentium, just as the Greeks had once captured Troy. After the war ends, the Trojans and the native people of Italy (including the Latins, Etruscans, and Ruffians) will live together and intermarry, becoming the ancestors of the Romans.
According to tradition, Troy fell in 1184 B.C. and Rome was founded in 753 B.C. Thus, more than 400 years passed between Aeneas' landing at the Tiber and the founding of Rome. Virgil explains part of this time gap in Book I. After the war, Aeneas will build a city called Lavinium and rule there for three years. His son Ascanius will move the city to nearby Alba Longa and rule for thirty years. His descendants will rule for 300 years after that until Romulus builds the walls around Rome. If you do some quick figuring, you'll realize that this leaves about 100 years unaccounted for. The reason for this may be that Virgil thought Troy fell at a later date than we do, or it may be that Virgil was less concerned with exact historical accuracy than he was with creating a poetic and almost mythological story of Rome's beginnings.