The area which is now Department of Coronel Felipe Varela, was inhabited by the Diaguita - Chapayane indians who lived in the village of Guandacol. The Spaniards came to the Bermejo Valley around 1634, but their occupation was resisted by the indians of Guandacol until 1636, when the indians were punished for their resistence by Don Geronimo Luis de Cabrera, who banished them from their lands and send them to the hills of the Famatina mountain range. Many died in their journey to the new land, and the few who survived settled in a new location. The old land of the Guandacol indians was reclaimed in 1649 by General Pedro NicolÃ¡s Brizuela, and was the land officially given back to the them on January 25 in 1650.
At the beginning of the 17th Century, there was a settlement of white people that can be considered as the first inhabitants of Hornillos, present day Villa UniÃ³n. They lived in peace with the local indigenous population, which were living in the region after being exiled from their lands.
In about 1750, three families from Western Chile came to the region and settled in Guandacol, but for unknown reasons left and settled down in Los Hornillos, which today is Villa UniÃ³n. Los Hornillos takes its name from the kilns that the locals used on the banks of the Bermejo River to bake homemade bread.
Los Hornillos becomes Villa UniÃ³n: On December 1 of 1869, the province was divided into twelve departments, which specified the limits of Departamento Guandacol, making Villa Guandacol the main town of the department and Los Hornillos was a district within the new department. On September 9 of 1881, the name of Departamento Guandacol is changed into Departamento General Lavalle and the main settlement was now Los Hornillos, whose name was changed into Villa UniÃ³n.
The name Villa UniÃ³n takes it's significance from the three Chilean families who were expelled from Guandacol and moved to Los Hornillos in 1880, where the local residents did not only give them protection, but also gave them ownership of land so that they could settle down. Therefore, Villa UniÃ³n represents the cohension and commitment among the families of these two peoples - "The Village of Union".
The town used to be centralized around the area where now is Hospital Zonal Dr. Eduardo SalomÃ³n Neira, due to the 1854 earthquake which left the town in ruins and the locals were forced to move their settlement a little north. The village of Villa UniÃ³n consisted of three major streets, arranged in a North - South manner. The main street today is Avenida NicolÃ¡s Davila.