New World 1526 - 1600
England cautiously explored the coast of North America and laid claim to everything north of the Savannah river. England established a couple of settlements for timber and to serve as bases for fishing. They tried to minimize exposure to native American Indians due to fears of contracting more diseases or other horrors.
The Dutch did not establish any settlements in the New World before 1625(?). They did, however, occasionally send ships to the area of the Spanish Main. These ships were favorably received and were often commissioned by Jewish investors from Poland or the New World itself.
The energies of Spain were spent in defense of Spain itself. Grenada and much of Aragon were lost to Muslin invaders(?). Navarre revolted and was no longer part of Spain. And to make matters worse; there was periodic war between Spain and France. Some ships were sent to the colonies in the New World in order to get gold and silver to help finance these wars, but Spain made very little effort to further develop the colonies.
Portugal should be considered separately from Spain. It did not have the Castilian's passion against the Muslins but it did, nevertheless, find itself at war against them in Africa. Many of the goods which traveled to and from the New World passed through Portugal (via Lisbon). Portugal sent ships to the New World and did help development there: most notable it secretly helped establish horse breeders in Cuba.
The Indies and the French
Although the flow of gold from the Americas to Spain was only a fraction of the size as in *our* world, the French were determined to deny the Spanish access. In 1547 France attacked the Colonies on the West Indies and gained control of virtually all the islands in the Gulf of Mexico. They did not, however, attack the mainland. France continued development of tobacco plantations in Hispaniola but found sugar production to be too labor intensive to be profitable.
The Incas suffered from a smallpox epidemic from 1529 - 1535. They lost 75% of their population and then descended into bloody civil wars. A small expedition from Panama reached the Incas in 1536 and found the war environment perfect for plunder, extortion, and some mercenary actions. The survivors returned to Panama in 1539 extremely wealth men. The Castilians did contribute to suffering in the area but did not destroy an empire as in OTL (in fact it could be said that there was no real empire when these Spaniards encountered the Inca because the region has reached a point of uncountable warring factions and veritable city-states). From 1539 to 1598 Castilians in Panama acted as middlemen in the limited trade between the Inca and Europe and between the Inca and Aztoltecs.
It is convenient to consider four main areas and peoples of the Aztoltec Empire: the Aztoltecs proper (Capital Aztoltecs), the *Tlaxcalans, the *Xilotepec and the *Cholula.
- The Capital Aztoltecs were quite conservative and officially refused to embrace any European technologies. They became increasingly concerned with the way Europeans influenced *Xilotepec and supported *Tlaxcala.
- The area immediately around Veracruz was inhabited by the *Xilotepec. These peoples were greatly influenced by the European settlement and adopted many Old World technologies and ideas including the wheelbarrow, buttons, stringed instruments, and crossbow. The plow saw some limited use - limited because horses were still rare and were usually used for military purposes. Several Castilians established themselves as warlords in the region (donatarios or adelantado de frontera).
- The *Tlaxcalans were traditional enemies to the Aztecs and the two regions were often at war. Spanish mercenaries found profitable employment on both sides of the "civil wars".
- The *Cholula were the ancient rulers of the Aztoltec region but had long since lost their power. They were culturally more liberal than most Aztoltecs. They were great traders, were open to new ideas and to western faiths. They adopted many new technologies including the bellows, gunpowder, shipbuilding, phonetic glyphs for their written language, the wheel, the true arch, the horse and plow. They also secretly traded with Dutch and English ships which occasionally visited their northern coastal towns.
After they learned of the fall of Hispaniola to the French, the Aztoltecs (along with the *Cholula) began a major military campaign on the mainland. In 1548 they fielded over 100 000 warriors and attacked the Tlaxcalan region. Despite some aid from the Castilians, *Tlaxcala quickly fell. Up to this point the Spanish believed they were witnessing an internal dispute, but the Aztoltec forces continued their march east into *Xilotepec territory. All villages outside of Veracruz itself quickly fell. After a 21 day siege Veracruz fell. Survivors were sacrificed or became slaves.
It should be noted that slaves in Aztoltec culture were generally well treated. Most of the slaves from the fall of Veracruz ended up in *Cholula where they continued to influence society. In large part because of their adoption of western technologies, the *Cholulans became more politically powerful than the Capital Aztoltecs by 1580. They eventfully assumed power over the Empire. In 1598 they asserted control over the town of Panama - This trade town then served as a direct link between the Aztoltec and *Incan civilizations.
So there we have it: By 1600 there were no European governments in Mesoamerica. The Aztoltecs had some continued contact with the Old World via occasional trading vessels (English, Dutch, French, and Portuguese). They had adopted many important Old World technologies and had successfully withstood the smallpox epidemic.