Shepstone was born near Bristol on 8th Jan 1817, the son of a Wesleyite preacher and a Quaker mother The family emigrated to Cape Colony in 1820 when Theophilus was 3 years old. His father lived and worked among the native tribes in South Africa which gave Theophilus a good knowledge of their languages. In 1838 he was with the group of British colonists who went to Port Natal to occupy it, but they returned to the Cape the next year. He was made British Resident of the Fingo and other tribes and later became Secretary of Native Affairs for the Natal government. He was treated with great respect by the local people and earned the name 'father'. He helped Cetshwayo become king of the Zulus after an audience with King Mpande. His relationship with the Zulus was good and Cetshwayo was made to promise him that the Zulus and the white colonists would live in peace. But Shepstone's insistance caused Cetshwayo's to harbour resentment against outside interference.
In 1876 he was asked by Lord Carnarvon to confer with the Boers of the Transvaal and try to bring them into the British South African confederation. He went to Pretoria in January 1877 and found the Boer administration in chaos. The result of the visit was that the Transvaal was annexed. He remained there as Administrator until January 1879 and was summoned to England in May of that year to advise the government on South Africa. He and his wife had 9 children, one of whom was a son who was killed at Isandhlwana. Theophilus himself died at Pietermaritzburg on 23rd June 1893.
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