The Aboyne teenager was out in front after racing to the turn in three-under-par 33 in the opening circuit at Club de Golf Los Leones in Santiago.
But she then dropped four shots in four holes on her back nine before eventually having to settle for a two-over-par 74.
That left McWilliam sitting in a share of 12th spot, five shots off the lead, while fellow Scot Connie Jaffrey was a shot further back in joint-21st.
In the men’s event, Liberton’s Kieran Cantley opened with a level-par 72 to sit just outside the top 20, with Euan Walker of Kilmarnock (Barassie) two strokes behind his compatriot.
On the LET, Solheim Cup contender Charley Hull wasted no time catching the eye of European captain Catriona Matthew as she got her 2019 campaign off to a flying start.
In an event also featuring Matthew, the 22-year-old English player carded a five-under-par 67 to lead by two shots after the opening round in the Fatima Bint Mubarak Ladies Open in Abu Dhabi.
Hull, a member of the last three Solheim Cup teams and hoping to be on Matthew’s side for the match at Gleneagles in September, signed for five birdies at Saadiyat Beach, four of which came in her opening seven holes.
Matthew signed for 73, four shots better than both Kylie Henry and Beth Allen, the 2016 winner, while Carly Booth had an 81.