The path from Funchal, a diocese created by Pope Leo X in 1514, which still exists as the See of the Portuguese Island of Madeira, and back in history, is a difficult one. Two facts need to be discussed - a tenous link back to the diocese of Tangers, and the far more interesting but also problematic link back to the Military Order of Christ, based in Tomar in Portugal. As a conclusion, the path goes back to Portugal in both cases, and the Military Order of Christ is involved in both cases.
One source, the Catholic Encyclopedia, seems to indicate that Funchal was detached from Tanger, a Portuguese diocese created by the Pope in 1471 on conquered territory on the coast of northern Morocco. This, however, is not stated explicitly, and the article in question is brief, with no sources given.
We do know, though, that the Pope, when establishing the diocese of Tanger (with Nuno (Rodriguez?) de Aguiar, Prior of S. Vincent of Fora as its first bishop) also intended to give it jurisdiction over Madeira, the Azores and the Cap Verde Islands. But due to the opposition of the Military Order of Christ, which actually had established the Catholic presence on Madeira and the other islands mentiones, this last point seems not to have been put into effect. In 1476 an agreement was reached, the bishops of Tanger receiving the right to exercise the "pontificalia" only.
What we do not know, is exactly how Rome interpreted this arrangement. It might well be that Rome considered the erection of Funchal in 1514 as somehow emanating from Tanger, notwithstanding that this hardly reflected the realities as they were in the area. But it is just as likely that Rome did not engage in any theorizing about this.
Funchal and the Military Order of Christ
Funchal (or rather Madeira) was established as a vicariate of the Military Order of Christ in 1434, and did in fact remain as such until it was erected a diocese in 1514. It is, however, important to note that this "vicariate" is not like vicariates in present parlance: Neither was it a subdivision within an autonomous territorial ecclesial jurisdiction (like a part within a diocese). Nor was it like an apostolic vicariate. It was an area under the care of the Military Order of Christ, which, although ecclesial of nature, cannot be considered equivalent to a diocese.
The rôle of this Military Order was of tremendous importance for the Portuguese propagation of faith, and the development of the church and ecclesial structures in the areas conquered, colonized or discovered by the Portuguese. In fact, nearly all of the Portuguese explorers were connected to the Military Order of Christ.
The dissolution of the Templars in 1312 led King Dinis of Portugal to create this order in 1318 to prevent the Order of St John from becoming too powerful in his kingdom.
The Order followed the rule of the Spanish Order of Calatrava, and its centre was Tomar in Portugal, in the present day diocese of Santarém, near Lisboa. The Portuguese King was the Master of the Order (formally: its Governor and Ruler), and the Grand Prior of Tomar was responsible for the spriritual Jurisdiction of the Order. The religious rule of the Knights was that of the Cistercian Benedictines (the Spanish Order of Calatrava). The chief cleric, called Vicar of Tomar, assigned priests to the overseas enterprises. The Abbey at Alcobaça provided spiritual guidance and had visitation rights.
Henri the Navigator became Master of the Order in the beginning of the 15th century. During his reign the Order employed the foremost geographers of the day and its ships carried out expeditons which were half-missionary and half-commercial. In 1417, the Order was charged with expanding Portuguese power beyond Ceuta (this enclave on the north African coast, now Spanish, was originally controlled by the Portuguese, and more exactly by the Military Order of Christ), leading to Church-State navigation of the unknown Oceans and, eventuelly, the later exploration of Africa, the Americas, India, Malaysia, Indonesia, China and Japan.
By 1419 the order had colonised Madeira.
The order also attempted to settle the Canaries in 1425, but the attempt failed. (The Canary islands were given by Pope Eugene IV to the Kingdom in Castile in 1436, and were gradually settled until the end of the 15th century. Portugal recognized Castilian sovereignty only in 1476.)
In 1438 the order began settling the Azores. The last island of the Azores was discovered in 1452. The order then carried out a systematic exploration of the west coast of Africa - Vasco da Gama was a knight of the Order. (However, by the first quarter of 16th century the Order declined; in 1542 it became purely honorific.)
Over time the Military Order of Christ was gradually replaced in ecclesiastic matters by the Secular Church through the aegis of the Royal patronage. Ceuta and Tanger were also at first were part of the Order of Christ's territory, as they were included in the territory given to the Order in 1417. But Portugal would soon create dioceses in Ceuta (1421), Tanger(1471), the Azores, and so forth.
In 1434, the Pope confirmed the spiritual jurisdiction of the Order over Madeira and "all other Islands" which would become subject to the Order. The Papal bull "Inter Caetera" dated 1456, confirmed the authority of the vicar of Tomar over the Azores, and all other discovered islands. The vicar of Tomar - now called vicar-general in some sources - was represented by a local vicar on these islands.
In 1514 the Pope created the diocese of Funchal. The same bull extinguished the position of vicariate of Tomar. Until 1514 the Latin Church even as far as India had depended from the Order of Christ whose centre was at the abbey of Tomar; now, Funchal took that rôle. Is A vicar-general represented the bishop of Funchal until 1534, when the diocese of Goa was erected.
Using the title of Primate, the bishops of Funchal from 1514-1533 ruled affairs in Madeira and in all the oversea territories which had been formerly under the jurisdiction of the Order of Christ. In 1533 the diocese of Funchal became an archdiocese with four suffragans : Azores, Cape Verde Islands, São Tomé and Goa. In 1550 Funchal became a diocese again.
The Archdiocese/ Diocese of Funchal was also known as the diocese of Madeira, Porto Santo, Desertas (the deserts) and Arguim. Porto Santo is a tiny Island near Madeira. Arguin (Arguim in Portuguese) was a Portuguese trading post and a fort on the West African coast, toaday in Mauritania, just to the south of Western Sahara.