The history of Banyuwangi cannot be separated from the history of the Blambangan Kingdom. In the mid-17th century, Banyuwangi was part of the Hindu Blambangan Kingdom led by Kangjeng Suhunan Prabu Tawang Alun.
Since 1743, administratively the VOC has considered Blambangan as its territory, based on the Ponorogo Agreement, one of the contents of which was the transfer of power of Kartasura in eastern Java (including Blambangan) by Pakubuwono II to the VOC. In fact, Kartasura never inherited Blambangan from the Mataram Sultanate because Kangjeng Suhunan Prabu Tawangalun had declared Balambangan's independence on February 23, 1653 and Mataram never subdued it again until Mataram was destroyed by the Raden Trunajaya War.
After the Ponorogo Agreement in 1743, the VOC never really established its power until the end of the 17th century, when the British East India Company established trade relations with Blambangan.[8]
The VOC immediately moved to secure its power over Blambangan at the end of the 18th century. This sparked a major war that lasted five years (1767–1772) and only ended in 1777.
In the series of wars, there were several fierce battles, one of which was called the Puputan Bayu War, which was the resistance of the Blambangan people to free themselves from the shackles of the VOC.
The Battle of Puputan Bayu took place on December 18, 1771, which was finally determined as the anniversary of Banyuwangi. Unfortunately, this war is not widely known in the history of the Indonesian people's struggle against the Dutch East Indies Company.
At the end of this war, the VOC won with the appointment of R. Wiroguno I (Mas Alit) as the first Regent of Banyuwangi and a sign of the collapse of the Blambangan Kingdom. However, sporadic resistance by the Blambangan people still occurred even though the VOC had controlled Blambangan. This can be seen from the absence of a sugar factory built by the VOC at that time, unlike other districts in East Java