The city was originally named by early British colonists after the name that the native indians had for the area. Much of the early history of the city a is described in great detail in Lucas Bridges’s book Uttermost Part of the Earth (1948).
For most of the first half of the 20th century, the city was
centered around a prison for serious criminals, in the same mould as British
with Australia or the French with Devil's Island. The prisoners found it virtually
impossible to escape from Tierra del Fuego and so became forced colonists. They
built a railway to the settlement, now a tourist attraction known as the End
of the World Train (Tren del Fin del Mundo). Ushuaia is surrounded by Magellanic
subpolar forests that give to a splendid landscape.
Ushuaia (pronounced [u'swaia]) is the capital of the Argentine province of Tierra del Fuego, and is world's 2nd southernmost city (you can argue the question a number of ways. It is on the southern coast of Tierra del Fuego in a wide bay, Martial mountain range to its north and the Beagle Channel to the south. Its population in 2001 census was 64,000.
There are three contenders for the title of southernmost city in the world; Puerto Williams on the Chilean island of Navarino (farther south but it has only 2500 inhabitants); and Punta Arenas, in Chile (much larger, with 120,000 people, but farther north).
Ushuaia can claim to be true city with a hospital, institutions of higher learning, industry (Grundig electronics plan), a transportation system. While all these characteristics are shared with the much larger city of Punta Arenas, in Chile, Ushuaia is located about 200 Km south of Punta Arenas. And, Puerto Williams has very little apart from the military personnel stationed there. However in 1998 the governments of Chile and Argentina agreed to allow Puerto Williams to display the title of the southernmost city in the world.