South America Strategy
The South America strategy calls for settling in the southernmost parts of South America, relying on Inca trade as a catalyst during the earlier parts of the game. This strategy comes with a Flash tutorial -- watch it before or after you've read the article.
Many consider this to be the best location on the Original Americas map. It's probably because you get access to all the resources you need within a relatively small area, which in turnt makes logistics easier.
In addition to that, you have the Inca nation close by. This opens up the possibility for lucrative trade.
Choosing European Power
This strategy is based on trade and economic superiority and so the Netherlands would be a good choice, although it will work well with any nation.
Your First Colony Site
The Incas pay very well for tobacco, so we want to establish our first colony on grassland which is perfect for growing tobacco. A good starting location can be seen in the flash tutorial. Build you Capitol using your Soldier. The Soldier is assigned to Liberty Bells production at the Town Hall. If you are on the Discoverer level, send your ship straight to Europe. If not, wait for some cargo (enough for 4 gold) and then go to Europe. The Pioneer is needed for clearing the forest in the colony tile, and then plowing it.
When the Founding Fathers selection pops up, pick Hernando de Soto if he is available. If not, select Peter Minuit. If neither of them are available, Jefferson or Brewster would be other good options.
Over in Europe: If on Discoverer, recruit four colonists, and make sure one of them is a Scout. On harder difficulties, sell your cargo for the stunning sum of 4+ gold and buy 2 horses. Wait for your first immigrant to appear on the docks before returning to the New World.
Back in the New World: Once your Pioneer has finished plowing the colony space, start building a road to the Inca capitol. You probably don't have enough tools to finish it, but you can get started on it. Sometimes one of the Inca cities are very close by, so you either have to wait for Minuit or pay them for building the road. Adjust to the situation you are in. If building the road has to wait, do something else of use. You could plow one more space of grassland and assign your colonist to tobacco planting (this opens for the possibility that your colonist will learn the skill of Master Tobacco Planter -- a skill usually not found in South America), or you could start building that Wagon Train that you will need to start trading with the Incas.
Now, if you are playing on Discoverer, the next steps are as follows: Bring in your 4 new colonists, set the Scout to farming for one/two turns in order to get two extra horses and then start visiting Indian Villages. Assign the other three colonists to Carpenter, Lumberjack, Farmer. Start building Lumber Mill, or you could go straight for the Wagon Train. Send ship back to Europe, and make sure you pick up Trade Goods there. Once you are back in the New World with Trade Goods, and your Wagon Train is finished, you probably have some tobacco piled up as well. Load Wagon Train with Tobacco and Trade Goods and head off to the Inca Capitol. Sell your cargo and buy Silver for the ridiculous price of 50 gold for 100 units. Bring Silver back to your ship and send it to Europe. The rest, as they say, will be history.
By now you've probably figured out that it's not quite that easy on harder difficulty levels, but the same goal applies here -- it only takes a bit longer. You may have to sell some of your tobacco in Europe to get your trade up and running. Then again, you might come by a Scout, get some money from the Natives or hit some Fountain of Youths, and then it's a whole other ball game. Because the game is so unpredictable, it's not possible to know how it will play out. But the main objectives are the same:
1. Build Tobacco Colony
2. At some point finish that road to the Inca Capitol -- the sooner the better.
3. Build a Wagon Train
4. Buy Trade Goods in Europe
5. Start trading Tobacco and Trade Goods for Silver
Building More Colonies
Once you've got your trade up and running, or at least got it on its feet, it's time to expand. One thing we know for sure is that at some point cheap tools will be harder to come by -- and then there's that inevitable Tools boycott by the King. Thinking ahead, we plan on getting our Tools Colony up and running as soon as possible. Check out good locations in the flash tutorial. Some people like to buy the tools they need, and that is possible, but you can in fact save a lot of money by getting Tools production going as early on as possible. Prioritize your Tools Colony, and get a Carpenter and a Lumberjack assigned to it as soon as possible. The sooner they start building Blacksmith's Shop and Warehouses (Which you'll need!), the better. Also note that you should at some point assign Elderly Statesmen to this colony, so that it can start its move towards Independence and consequently greater efficiency. When your Tools Colony provides 72 Tools each turn, you will be glad you made those early arrangements!
So then, what's next? Get colonies for Cotton, Sugar and Fur up and running. Again, some great locations can be seen in the flash tutorial. Make sure that you at some point send one of your Free Colonists or Indentured Servants to the Tupi Village in Argentina -- it will usually teach you the skill of Cotton Planter or Fur Trapper. Sugar Planter skills are taught in many Tupi villages, so that shouldn't be a problem. If you can't get the Tobacco Planter and/or Cotton Planter/Fur Trapper, send a Privateer with two Free Colonists up to North America and search for those skills there. How long it takes depends on where you find those skills. If some skills are nowhere to be found (which is rare), your only hope is to assign Free Colonists to the desired task (planting/trapping etc.), preferably on a plowed field (if planting) with that Prime Resource on it. It has been reported that colonists may learn that skill faster if there is an Indian Convert working alongside them, and/or there is a Schoolhouse/College/University present, but this is not certain.
After this, the rest should come naturally. Continue selling Silver and other commodities in Europe. Build Custom Houses and watch your bank account explode! And we all know this: Every great army depends on a superior economy. If you follow this strategy, you'll be able to buy an army and a navy great enough to withstand any exterior threat.
And that concludes this South America Strategy for Sid Meier's Colonization. Good luck!