The chronology package defines a number of counters, lengths and boxes within the chronology environment. That means these lengths/boxes already exist after the first use of \begin{chronology}...\end{chronology}, causing an error when you use it a second time. Removing the offending \newcounter, \newlength and \newsavebox definitions from \newenvironment{chronology} in the .sty file fixes this:
\newcounter{step}\newcounter{stepstart}\newcounter{stepstop}%
\newcounter{yearstart}\newcounter{yearstop}\newcounter{deltayears}%
\newlength{\xstart}\newlength{\xstop}%
\newlength{\unit}\newlength{\timelinewidth}%
\newsavebox{\timelinebox}%
Now, compiling your MWE, it produces the correct result without error.
\documentclass{article}
\usepackage{chronology}
\begin{document}
\begin{chronology}[2]{2000}{2012}{5ex}{\textwidth}
\event{2004}{single event}
\event[2007]{2009}{Multi-year event}
\end{chronology}% Inserted this missing environment \end
\begin{chronology}[2]{2000}{2012}{5ex}{\textwidth}
\event{2002}{single event 2}
\event[2006]{2008}{Multi-year event 2}
\end{chronology}
\end{document}
This error is not fatal for compiling your document. You can skip over (or ignore) these errors, and TeX should still produce the desired output. However, I would suggest contacting the package author and requesting an update my modifying/correcting this behaviour since it is fairly simple. Some commands obey scoping rules; in this case the definition was global. For completeness, here's the new, updated chronology.sty:
%%
%% This is file `chronology.sty',
%% generated with the docstrip utility.
%%
%% The original source files were:
%%
%% chronology.dtx (with options: `package')
%%
%% This is a generated file.
%%
%% Copyright (C) 2010 by Levi Wiseman
%%
%% This work may be distributed and/or modified under the
%% conditions of the LaTeX Project Public License, either version 1.3
%% of this license or (at your option) any later version.
%% The latest version of this license is in
%% http://www.latex-project.org/lppl.txt
%% and version 1.3 or later is part of all distributions of LaTeX
%% version 2005/12/01 or later.
%%
%% This work has the LPPL maintenance status `maintained'.
%%
%% The Current Maintainer of this work is Levi Wiseman.
%%
%% This work consists of the file chronology.dtx and the derived files
%% chronology.ins, chronology.pdf, and chronology.sty.
%%
\NeedsTeXFormat{LaTeX2e}
\ProvidesPackage{chronology}[2010/6/12 v1.0 Horizontal timeline]
\RequirePackage{calc}
\RequirePackage{tikz}
\RequirePackage{ifthen}
% MOVED NEW DEFINITIONS (COUNTERS/LENGTHS/BOXES)
\newcounter{step}\newcounter{stepstart}\newcounter{stepstop}%
\newcounter{yearstart}\newcounter{yearstop}\newcounter{deltayears}%
\newlength{\xstart}\newlength{\xstop}%
\newlength{\unit}\newlength{\timelinewidth}%
\newsavebox{\timelinebox}%
\newenvironment{chronology}[5][5]{%
%\newcounter{step}\newcounter{stepstart}\newcounter{stepstop}%
%\newcounter{yearstart}\newcounter{yearstop}\newcounter{deltayears}%
%\newlength{\xstart}\newlength{\xstop}%
%\newlength{\unit}\newlength{\timelinewidth}%
\setcounter{step}{#1}%
\setcounter{yearstart}{#2}\setcounter{yearstop}{#3}%
\setcounter{deltayears}{\theyearstop-\theyearstart}%
\setlength{\unit}{#4}%
\setlength{\timelinewidth}{#5}%
\pgfmathsetcounter{stepstart}%
{\theyearstart+\thestep-mod(\theyearstart,\thestep)}%
\pgfmathsetcounter{stepstop}{\theyearstop-mod(\theyearstop,\thestep)}%
\addtocounter{step}{\thestepstart}%
%\newsavebox{\timelinebox}%
\begin{lrbox}{\timelinebox}%
\begin{tikzpicture}[baseline={(current bounding box.north)}]%
\draw [|->] (0,0) -- (\thedeltayears*\unit+\unit, 0);%
\foreach \x in {1,...,\thedeltayears}%
\draw[xshift=\x*\unit] (0,-.1\unit) -- (0,.1\unit);%
\addtocounter{deltayears}{1}%
\foreach \x in {\thestepstart,\thestep,...,\thestepstop}{%
\pgfmathsetlength\xstop{(\x-\theyearstart)*\unit}%
\draw[xshift=\xstop] (0,-.3\unit) -- (0,.3\unit);%
\node at (\xstop,0) [below=.2\unit] {\x};}}{%
\end{tikzpicture}%
\end{lrbox}%
\raisebox{2ex}{\resizebox{\timelinewidth}{!}{\usebox{\timelinebox}}}}%
\newcommand{\event}[3][e]{%
\pgfmathsetlength\xstop{(#2-\theyearstart)*\unit}%
\ifx #1e%
\draw[fill=black,draw=none,opacity=0.5]%
(\xstop, 0) circle (.2\unit)%
node[opacity=1,rotate=45,right=.5\unit] {#3};%
\else%
\pgfmathsetlength\xstart{(#1-\theyearstart)*\unit}%
\draw[fill=black,draw=none,opacity=0.5,rounded corners=.2\unit]%
(\xstart,-.2\unit) rectangle%
node[opacity=1,rotate=45,right=.5\unit] {#3} (\xstop,.2\unit);%
\fi}%
\newcommand{\decimaldate}[3]{(#1-1)/31/12+(#2-1)/12+#3}
\endinput
%%
%% End of file `chronology.sty'.
