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The original Latin word "universitas" was used at the time of emergence of urban town life and medieval guilds, to describe specialised "associations of students and teachers with collective legal rights usually guaranteed by charters issued by princes, prelates, or the towns in which they were located."

The original Latin word referred to degree-granting institutions of learning in Western Europe, where this form of legal organisation was prevalent, and from where the institution spread around the world. For non-related educational institutions of antiquity which did not stand in the tradition of the university and to which the term is only loosely and retrospectively applied, see ancient higher-learning institutions.

Prior to their formal establishment, many medieval universities were run for hundreds of years as Christian cathedral schools or monastic schools (Scholae monasticae), in which monks and nuns taught classes; evidence of these immediate forerunners of the later university at many places dates back to the 6th century AD.

The earliest universities were developed under the aegis of the Latin Church, usually from cathedral schools or by papal bull as studia generalia (n.b. The development of cathedral schools into universities actually appears to be quite rare, with the University of Paris being an exception — see Leff, Paris and Oxford Universities), later they were also founded by Kings (University of Naples Federico II, Charles University in Prague, Jagiellonian University in Krakow) or municipal administrations (University of Cologne, University of Erfurt).

The first universities with formally established guilds in Europe were the University of Bologna (1088), the University of Paris (c. 1150, later associated with the Sorbonne), the University of Oxford (1167), the University of Palencia (1208), the University of Cambridge (1209), the University of Salamanca (1218), the University of Montpellier (1220), the University of Padua (1222), the University of Naples Federico II (1224), the University of Toulouse (1229)., the University of Siena (1240).

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