The conquistador Pedro de Valdivia sent Geromino Alderete at the end of 1552 to Spain to confirm his governorship of Chile. However, on arrival in Madrid he found out that Carlos I (Charles V) had transferred sovereignty of Chile to his son, Philip.
As a result, Alderete had to travel to London for an audience with Philip at the court of Mary I. Philip granted Valdivia the governorship of Chile for life. (He could not have done this if he was not sovereign of Chile.)
On the journey back to Spain, Alderete received news that Valdivia had died. So, he returned to London where Philip made him governor.
These and other accounts make it clear that Philip enjoyed sovereignty of Chile. With that must have come some sort of title. The wording Reino de Chile is relatively common in Chilean history.
Diccionario Biográfico Colonial de Chile, José Toribio Medina
Historia de Todas las Cosas que han Acaecido en el Reino de Chile y de los que lo han gobernado (1536-1575), Alonso de Góngora Marmolejo
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