Machu Picchu was probably built by Pachacuti Inca as a royal estate and religious retreat in 1460-70. After his death, it remained the property of his allus (kinship groups) who were responsible for maintenance, administration and continuing building. As a remarkable sacred site (location as well as buildings), it surely was visited by Topa Inca and the last great ruler, Huayna Capac, although each in turn built their own estates and palaces. Few outside the Inca's retainers would have know of its existence as travel was restricted except by Inca decree.
Huayna Capac and an estimated 50 percent of the population died of small pox in 1527? Inca governmental capability must have suffered greatly resulting in a period of turmoil. The empire then fell into civil war over Inca secession. Machu Picchu is thought to have been abandoned at this time because cost of maintenance was prohibitive while epidemic and war depleted the remaining male population.
Machu Picchu as a ceremonial site ,had no administrative or commerce use and was located on a remote secondary road in near impassable terrain in the high cloud forest. It had little military value located high above an impassable section of the Urubamba River canyon. Any movement in that direction to or from Cusco and the Sacred valley up river would have been mainly by other Inca roads, either the high road near Salcantay or by the Lucumayo valley road.
It is difficult to understand from our knowledge of Greek, Egyptian and other great early civilizations with written records how such a magnificent site could not of been discovered by the Spanish. Yet I can see how it could have happened. The Inca were a completely ordered an regimented society .Although great numbers of people were moved around for corporate state projects (mit'a) and resettlement, once at a location, they did not move. The royal roads were reserved for official travel. Machu Picchu (surely not its name) as a isolated ceremonial site was even more restricted, probably to the Inca and other high persons. Of course it would have required a steady supply of outside goods. Machu Picchu like most Inca sites was undergoing continuing construction and must of had a resident crew of builders as well as attendants, planters etc.
The Incas were apparently able to control their remarkable state system through a pyramidal hierarchy with information and direction flowing down through 10 overseers to 100, to a 1000 and so on. We know from historical writing and the archaeological record that they did not possess an alphabet i.e. written language. Although, they certainly must have utilized some symbols and perhaps diagrams. We know that the Quipu ( collection of colored strings and knots) was extensively used as an accounting and record keeping device. This required a trained interpreter/programmer to accompany it. It is interesting that the Spanish were unable to locate or interrogate even one of these specialists. The Inca also maintained a class or guild of verbal historians. What records of the state that were kept and how remain a mystery.
With the catastrophic collapse of Inca structure following arrival of the Spanish, these specialists/historians were scattered and forgotten. The Spanish, most of whom were illiterate, uneducated adventurers had little interest in seeking or preserving anything not producing wealth and power. By the time scholars and administrators arrived the information was lost.
When the Pizarros arrived in Cusco in 1532, Machu Picchu must have been mostly forgotten and the few who remembered, died without revealing its location to the Spanish. Machu Picchu or whatever it was know as at that time, would not have been of much importance to either the crumbling Inca state or the treasure hungry Spanish.
Manco Inca staged a country wide rebellion in 1536. After a failed siege of Cusco, Manco, along with remnants of the court, army and followers, abandoned his headquarters at Ollantaytambo. Fleeing back into the remote Vilcabamba beyond Machu Picchu, He burned and destroyed Inca settlements and sites accessible to the Spanish including Llatapata at the start of the now famous trail to Machu Picchu from the Urubamba River. Of course, by this time the trail and the site itself would have been long overgrown and the approach blocked by seasonal landslides that so hinder backcountry travel in Peru.
Beyond personal observations and many trips to Machu Picchu, I have borrowed heavily from the excellent work of John Hemming, John Rowe and Johan Reinhard. Their writings are a must for anyone attempting an understanding of the Inca and the centuries of cultural development that preceded them.