According to the Burmese chronicles, Bagan was founded in the second century AD, and fortified in 849 AD by King Pyinbya, 34th successor of the founder of early Bagan.
Mainstream scholarship however holds that Bagan was founded in the mid-to-late 9th century by the Mranma (Burmans), who had recently entered the Irrawaddy valley from the Nanzhao Kingdom. It was among several competing Pyu city-states until the late 10th century when the Burman settlement grew in authority and grandeur.
The Bagan Archaeological Department has started a survey and reconstruction effort with the help of UNESCO experts. Visitors are prohibited from entering 33 damaged temples.
Wikipedia
From 1044 to 1287, Bagan was the capital as well as the political, economic and cultural nerve center of the Pagan Empire. Over the course of 250 years, Bagan’s rulers and their wealthy subjects constructed over 10,000 religious monuments (approximately 1000 stupas, 10,000 small temples and 3000 monasteries) in an area of 104 square kilometres (40 sq mi) in the Bagan plains. The prosperous city grew in size and grandeur, and became a cosmopolitan center for religious and secular studies, specializing in Pali scholarship in grammar and philosophical-psychological (abhidhamma) studies as well as works in a variety of languages on prosody, phonology, grammar, astrology, alchemy, medicine, and legal studies. The city attracted monks and students from as far as India, Sri Lanka and the Khmer Empire.
The culture of Bagan was dominated by religion. The religion of Bagan was fluid, syncretic and by later standards, unorthodox. It was largely a continuation of religious trends in the Pyu era where Theravada Buddhism co-existed with Mahayana Buddhism, Tantric Buddhism, various Hindu (Saivite, and Vaishana) schools as well as native animist (nat) traditions. While the royal patronage of Theravada Buddhism since the mid-11th century had enabled the Buddhist school to gradually gain primacy, other traditions continued to thrive throughout the Pagan period to degrees later unseen.
The Pagan Empire collapsed in 1287 due to repeated Mongol invasions (1277–1301). Recent research shows that Mongol armies may not have reached Bagan itself, and that even if they did, the damage they inflicted was probably minimal. However, the damage had already been done. The city, once home to some 50,000 to 200,000 people, had been reduced to a small town, never to regain its preeminence. The city formally ceased to be the capital of Burma in December 1297 when the Myinsaing Kingdom became the new power in Upper Burma.
Bagan survived into the 15th century as a human settlement, and as a pilgrimage destination throughout the imperial period. A smaller number of “new and impressive” religious monuments still went up to the mid-15th century but afterward, new temple constructions slowed to a trickle with fewer than 200 temples built between the 15th and 20th centuries. The old capital remained a pilgrimage destination but pilgrimage was focused only on “a score or so” most prominent temples out of the thousands such as the Ananda, the Shwezigon, the Sulamani, the Htilominlo, the Dhammayazika, and a few other temples along an ancient road. The rest—thousands of less famous, out-of-the-way temples—fell into disrepair, and most did not survive the test of time.