Backing up Jon's answer a bit here...
The surrounding events place Daniel's life at around the seventh and sixth century BC. Daniel however is a rather unique book in the Hebrew scriptures, in that it was actually not written in Hebrew. Instead, it appears to be a work of Aramaic.
Why the difference? Well the most logical reason would be that it was written much later than the rest of the Old Testament. At around about the third century BC, Hebrew had become a "Dead language" (much like we use Latin today), and the common folk wrote and spoke Aramaic.
In fact, there are now several theories among scholars about when Daniel was written, but all agree that it was probably written in the fourth to second centuries BC (the vast majority the second).
The most widely accepted theory seems to be the following:
The stories of chapters 1-6 are considered to be a literary genre of
legends that are older than the visions of chapters 7-12. The visions
in the latter half of Daniel are theorized to be written by an
anonymous author in the Maccabean era, who assembled the legends with
the visions as one book, in the 2nd century BCE.
What this means is that nothing in the first half of Daniel can really be taken as a literal "history", as it was at best an oral tradition for 400 years before being written down.