Mercantilism is an economic theory that was popular in Europe from the 16th to the 18th centuries. It emphasizes the importance of a strong national economy, where a country seeks to accumulate wealth through trade, particularly by exporting more than it imports. Governments often intervened in the economy to promote this balance, using tariffs and subsidies to protect domestic industries. Under mercantilism, colonies played a crucial role as sources of raw materials and markets for finished goods. This system encouraged countries to expand their territories and establish colonies, leading to competition and conflicts among European powers for control of resources and trade routes.