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Palazzo is more broadly used in Italian than its English equivalent “palace”. In Italy, a ''palazzo'' is a grand building of some architectural ambition that is the headquarters of a family of some renown or of an institution, or even what the British would call a “block of flats” or a tenement.
The words “palazzo” (Italian), “palace” (English) or “palais” (French) and the other similar words come from the name of the Palatine hill in Rome (in Latin, Palatium). On this hill the patrician family Julia (“gens Julia” in Latin) owned some land and built their residence. When Octavian became Roman emperor after his succession to Julius Caesar their home and the name of the Palatine hill itself became synonymous with Imperial residence.