Did the Bible intend that Shiloh should be Israel’s capital and spiritual center?
It seems that the Bible considered the Shechem area, including Shiloh and Beth-el, as the focal point for Israel’s capital and sanctuary. The Bible repeatedly highlights the spiritual significance of Shechem and its nearby cities of Shiloh and Beth-el. Abraham built an altar in the area, as did Jacob, Moses mandated that one be built there, and Joshua built an altar in the area in chapter 8 and later in 18. The patriarch Joseph was buried there. Jacob mentions Shiloh in his blessing to Judah, whose descendants would be kings. Jacob gave Shechem to his most beloved son Joseph.
When Abraham “passed through the land unto the place of Shechem,” God told him: “I will give this land to your descendants, and he built an altar to the Lord there.” While the traditional interpretation of “this land” is the entire land of Canaan, it is possible that it is only referring to Shechem, the place specifically mentioned in the verse, the place where Abraham offered his sacrifice, “having Beth-el on the west and Ai on the east.”
Jacob slept in this area when he left his parents’ home to go to the home of his uncle Laban. He had a vision there. When he awoke, “He said, surely the Lord is in this place.” He added: “How full of awe is this place. This in none other than the house of God, and this is the gate of heaven.” Jacob set a pillar there and poured oil on it. And, although the place had been named Luz, “he called the name of the place Beth–el (‘House of God’).” He made an oath that if he returns safely “this stone that I set up for a pillar shall be God’s house.” While the Torah does not state that he fulfilled his vow, we can presume that he did, and that his descendants did so as well.
The Samaritans believed and still believe that Shechem, not Jerusalem, is the holy area in Israel, the county’s capital and the site for its sanctuary. The Samaritans have their own Torah which is very similar to the Masoretic text used by Jews today, but with some significant differences. One of the many differences is that they organized the Decalogue (Ten Commandments) so that the tenth statement is not about adultery but it mentions that Shechem should be considered a holy place. Where they insisting that the capital and temple be in Shechem because this is where it was in the past and, if not, what basis did they have for their claim?
The tabernacle was placed in Shiloh by Joshua and remained in Shiloh according to the Talmud for 369 years until it was destroyed by the Philistines. The ark was then taken to the city of Kiriath-Jearim in the same area where it remained for an additional twenty years.
Thus it seems that from the onset of the Israelites, as far back as Abraham, the Shechem-Shiloh-Beth-el area was consider a spiritual area, altars were placed there, and there was a sanctuary in the area for some four hundred years.
When David became king, he established Jerusalem as the political capital of the twelve tribes, which he united, and as a political move changed the area for the sanctuary from Shiloh and the Shechem area to Jerusalem. However, during the start of the reign of Rehoboam, his grandson, ten tribes split off from his kingdom and they established its capital in Shechem and rebuilt its sanctuary in the Shechem area, in Beth-el. 
A possible additional proof of the sanctity of the Shechem area
An additional proof can arguably be found in the strange placement of Joshua 8:30-35 as an interruption of the conquest events. Chapter 8 speaks about the conquest of Ai and 9 about dealings with other Canaanites reacting to this conquest. But the six sentences seem to intrude. Joshua instructs the Israelites to carry out Moses’ instruction to: (1) build an altar on Mount Ebal, in the Shechem area; (2) write Moses’ Torah on the altar; (3) recite blessings and curses; and (4) read the Torah to the people. Why is this mentioned here after the conquest of Ai, and what did Moses and Joshua intend?
Many different ideas have been offered running the gamut from: (1) These activities were done as soon as the Israelites crossed the Jordan but not after the conquest of Ai. (2) They were not done after Ai but fourteen years later after the completed conquest and division of land. (3) The events recorded in the six verses occurred as indicated immediately after the Ai conquest.
It is possible that the third idea is correct. Joshua and the Israelites had to wait until Ai was captured in order to set up the altar in its proper place, for Ai and its near-by Beth-el were in the Shechem area, and was the exact place where Abraham and Jacob had set up their altars, the very area where a sanctuary would be built in the future until King David removed the country’s capital and sanctuary to Jerusalem for political reasons, since Jerusalem was in the middle of the northern and southern tribes, and the new location would help solidify the tribes.
 Genesis 12:6-7.
 Genesis 33:18-20.
 Deuteronomy 27:1-10.
 Joshua 24:32.
 Genesis 49:10. The first king from the tribe of Judah was David.
 Genesis 49:22 to 26. Many scholars do not interpret the mention of Shechem in this section as the city Shechem.
 Genesis 12:7.
 Genesis 12:8. It was only after he offered his sacrifice, in verse 9, that Abraham headed south.
 Genesis 28.
 Scholars differ in identifying the origin of this nation. Some, for example, think they were non-Israelites who came to the Samaria area after the ten tribes were defeated by the Assyrians and expelled from the land. Others think they may have been non-Israelites, but they intermarried with the remnant of Israelites who were still in the area. All agree that the Samaritans accepted many ancient Israelite practices. Was the idea that Shechem is the holy area one of them?
 Jerusalem did not have any Israelite significance until it was captured by King David from Jebusites and made into his capital city.
 Some scholars argue that there are three versions of the original ur-Torah, which no longer exists: the Septuagint, the Samaritan Bible, and the Masoretic Text. Others, including me, are convinced that the former two were based on what was later called the Masoretic Text, but changes were made in the Septuagint and Samaritan Bible for various reasons (as changes were made in translations, as in Targum Onkelos). The changes in the Samaritan Bible were made to fit their theology.
 I Samuel 4:3-5.
 I Samuel 6:21-7:2.
 Babylonian Talmud Zevachim 118b. The northern kingdom also placed a sanctuary in the city Dan to accommodate Israelites who could only come to the Shechem area with great difficulty. I Kings 12:31, II Kings 17:29-32, and II Chronicles 13:9.
 In Deuteronomy 27.
 See Tosephta Sotah 8, Jerusalem Talmud Sotah 7:3, Babylonian Talmud Sotah 36a, Josephus Antiquities 5, Rashi, Radak, Abrabanel, and many others.
 These two ideas are based on the principle of biblical interpretation, held by Rashi and many others, that there is no strict chronological order to the narration of biblical events. A classical example is: the Torah mentions God’s command to build a tabernacle, but like here, the story is interrupted by a telling of the Israelite worship of the Golden Calf in Exodus 32. Many commentators explain that the incident of the Golden calf preceded all of God’s commands about the tabernacle. See Babylonian Talmud Pesachim 3a and Sotah 36a.