The history of alpacas begins in the mists of South American prehistory. There is evidence that alpacas were domesticated as much as 6000 years ago. The fact that the we do not have a record of any written language developed by the South American civilizations complicates the effort to document the early history of the alpaca. 
Alpacas are associated with the goddess "Pachmana", the Earth Mother, iin Andean mythology. It was believed that alpacas were loaned to humans, to be left on earth for only as long as they were properly cared for and respected. According to this legend, alpacas were given as a gift at the mountain Ausangate in Peru. 
When the Spanish Conquistadores arrived in Peru, they found a civilization that was based on textiles. The Inca people lived in a society that was literally ‘woven together” by the fibers supplied by alpacas, llamas and cotton. Inca weavers made everything from bridges to roofs from fibers, and they recorded their wealth in patterns of knots. 
Among the Andean people cloth was currency, and the fleece of the alpaca was one of the most prized. The loyalty of nobles was rewarded with cloth made of alpaca. They gave away stacks of alpaca textiles to assuage the guilt of defeated lords. Their armies were paid with alpaca textiles. 

In this society, cloth making was a major enterprise of the State. In fact, the warehouses filled with alpaca textiles were considered so precious that Inca armies deliberately burned them when retreating from battle. 
However, the Spaniards did not recognize the true treasure of these peoples, being blinded by the abundant gold, silver and precious stones. 
In the effort to conquer and subjugate the native people, there ensued a wholesale slaughter of alpacas and llamas. By some accounts as much as 90% of the alpacas in South America were slaughtered and left to rot in the fields. The carefully tended alpaca herds, divided by color and quality, were killed or dispersed. Only a small remnant of these wonderful animals were saved by the native population when they were secreted off to the barren and remote altiplano. 
Alpacas faded into the background of history after the Spanish invasion of South America