In 1235 Danylo Romanovych of Halych granted the town a city charter and moved the capital of his domain there. He also built a new castle atop the hill in 1240 and created an Orthodox bishopric there (now the Basilica of the Birth of the Virgin Mary). Until the 14th century the town developed as part of that state and then as part of the short-lived Princedom of Chełm and Bełz. In 1366 king Casimir III annexed the region to Poland. On 4 January 1392 the town was relocated and Magdeburg Law was granted with vast internal autonomy.
A Latin Catholic diocese of Chełm was created in 1359, but was moved to Krasnystaw after 1480. No longer a residential bishopric, Chełm is today listed by the Catholic Church as a titular see. The Orthodox bishopric entered communion with the see of Rome in the late 16th century, but in 1867 it became part of the Russian Orthodox Church.
Throughout the ages, the town was the capital of a historical region of the Land of Chełm, administratively a part of the Ruthenian Voivodeship with the capital in Lviv. The city prospered in the 15th and 16th centuries. It was then that The Golem of Chełm by Rabbi Elijah Ba'al Shem of Chelm became famous, but the city declined in the 17th century due to the wars which ravaged Poland at the time. In the 18th century the situation in eastern Poland was stabilized and the town started to slowly recover from the damages suffered during The Deluge and the Khmelnytsky's uprising. It attracted a number of new settlers from all parts of Poland,
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