The Duchy of Parma was created in 1545 from that part of the Duchy of Milan south of the Po River, which was conquered by the Papal States in 1512. These territories, centered on the city of Parma, were given as a fief for Pope Paul III's illegitimate son, Pier Luigi Farnese.
In 1556, the second Duke, Ottavio Farnese, was given the city of Piacenza, becoming thus also Duke of Piacenza, and so the state was thereafter properly known as the Duchy of Parma and Piacenza (Italian: Ducato di Parma e Piacenza).
The Farnese family continued to rule until their extinction in 1731, when the duchy was inherited by the young son of the King of Spain, Don Charles, whose mother Elizabeth Farnese was the Farnese heiress. He ruled until 1735 during the War of the Polish Succession, when Parma was ceded to Emperor Charles VI in exchange for the Two Sicilies.
The Habsburgs only ruled until the conclusion of the Treaty of Aix-la-Chapelle in 1748, when it was ceded back to the Bourbons in the person of Don Philip, Don Charles's younger brother, which received also the little Duchy of Guastalla. As Duke Philip, he became the founder of the House of Bourbon-Parma reigning over the Duchy of Parma, Piacenza and Guastalla (Italian: Ducato di Parma, Piacenza e Guastalla).
The Duchy of Parma and Piacenza joined with the Grand Duchy of Tuscany and the Duchy of Modena to form the United Provinces of Central Italy in December 1859, and merged with the Kingdom of Sardinia into the Kingdom of Italy in March 1860 after holding a referendum.
The House of Bourbon continues to claim the title of duke of Parma to this day.