The China-India border dispute came into sharp focus after the Chinese Foreign Ministry warned New Delhi not to allow the Dalai Lama to visit Arunachal Pradesh.

Why does China object to Dalai Lama visit?
China claims Arunachal Pradesh as part of Tibet and routinely objects to any visits by top leaders, officials and diplomats to the area. China had also aired similar concerns in October last year when India granted permission to the Tibetan spiritual leader to visit Arunachal Pradesh at the invitation of the state government.The Dalai Lama's visit to Arunachal Pradesh is expected to take place this year.

What is Tawang region dispute between India and China?
Arunachal Pradesh (called South Tibet in China) is a full-fledged state of India. India's sovereignty over the area is internationally recognized and its residents have not shown any inclination to leave India. The majority of the international maps puts the area in India. China has some historical claims through its ownership of Tibet, but the geography primarily favors India.
The primary controversy is over the ownership of the Tawang tract (northern part of the state) where India's biggest monastery and an ancient trading town lies.

Arunachal History:
No one knows the ancient history of Arunachal. It borders Assam (a core part of Indian civilization) and has a few old temples. But, it is also influenced by Tibetan, Burmese and Bhutanese cultures.
In the 16th century, the most important heritage of the state – Tawang Monastery was built. This is one of the most important sites for the Tibetan Buddhists. The area is assumed to have been populated by the Tibetans at that point.
Everyone argues whom it should belong to given the ancient history. The verdict is uncertain. In the ancient times, Indian empires and Tibetan empires were in harmony and the exact border was neither drawn nor enforced. But, things would change.

Modern History:
Until 1912, the border between Tibet and India was not quite delineated. Very few people lived there for it to matter. Neither the Mughals nor the British were controlling the region.
In short, both India and Tibet were sort of confused where the borders lied. Britishers initially didn't bother as they found nothing. Eventually, they discovered the Tawang Monastery and it was time to draw the borders. In 1914, the representatives of Tibet, China and British India sat together to draw the borders.

Tibet History:
For a sizable chunk of history, Tibet was an independent region. However, under the Yuan dynasty (circa 1200 AD) Tibet came under China. Since then China has started claiming Tibet under her rule. In the 18th century, the Chinese grip would be loosened as the Qing dynasty started decaying. By about 1860s, Tibet began to be recognized as a separate country.
By 1913, Qing dynasty would completely collapse in China and Tibet would expel all of the remaining Chinese representatives from Tibet.

Simla convention of 1914
In 1914, Tibet was an independent, but weak country. British India negotiated hard and got Tibet to accept that the region of Tawang and the area south of it belonged to India. Everyone was happy except China. Chinese representative in the meeting, withdrew from that and since then China refused to accept the accord resulted out of the meeting.
After the meeting, the border was not fully enforced. In 1935, a British administrative office would go back to the convention ruling. Soon, India would start using the region in her maps.

Who does it belong to?
China never recognized Tibet's independence nor the 1914 Simla convention. In 1950 China would completely take over Tibet. Thus, according to China, Tawang region belongs to her. China especially wants to hold on to the monastery as that is a leading center of Tibetan Buddhism in India.
According to India, most of the state had ancient Indian influence from Assam and in 1914 Tibetans signed an agreement to give the state to India. Also, from an Indian perspective, keeping the Tawang monastery within India is the best way to protect whatever is remaining of Tibetan culture.
In 1962, India and China warred over the region. But, the geography clearly favors India and China had to pull back from Tawang. Since then India has established complete control over the region. It is now part of India just as any other part of India.