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The main executive power of Croatian state is the Government (in Croatian: "vlada"), presided by the Prime Minister.

Any negative trends in the large EU economies such as Germany or Italy also have a negative impact on Croatia as they are its biggest trade partners.

The president has limited executive powers, he is still commander-of-chief of the armed forces, he cooperates in formulation and execution of the foreign policy and the national security policy, represents Croatia home and abroad, convenes Parliament and can bring issues at Government. Main and the most essential duty of the President is that he is granted power to issue decress with the force of law during war time.

The Croatian economy is post-communist. In the late 1980s, at the beginning of the process of economic transition, its position was favourable, but it was gravely impacted by de-industrialization and war damages.

Inflation and unemployment rose and the kuna fell, prompting the national bank to tighten fiscal policy. A new banking law passed in December 1998 gave the central bank more control over Croatia's 53 remaining commercial banks. Croatia is dependent on international debt to finance the deficit. A recently issued Euro-denominated bond was well received, selling $300 million, which helped offset economic losses from the Kosovo crisis.

The Supreme Court (Vrhovni sud) of the Republic of Croatia is the highest court. Court hearings are open, and judgments are made publicly, except in issues of privacy of the accused. Judges are appointed by the National Judicial Council and judicial office is permanent (until 70 years of age). President of the Supreme Court is elected on 4-year term by the Croatian Parliament at the proposal of the President of the Republic.

The medieval Croatian kingdom reached its peak during the reign of King Petar Krešimir IV (1058-1074) when it was composed of twelve counties and was slightly larger than in Tomislav's time, also including the four southern Dalmatian duchies (Pagania, Zahumlje, Travunia and Duklja). The end of Petar Krešimir IV also marked the de facto end of the Trpimirovic ruling dynasty which had ruled the Croatian lands for over two centuries.

The Chamber of Counties or Županijski Dom used to be composed of three deputies from each of the 21 counties (županije). However, as it had no practical power over the Chamber of Representatives, in 2001, the Chamber was abolished and whatever powers it had were transferred directly to the county governments.

The princes of Bribir from the Šubic family became particularly influential during the time of Pavao Šubic (1272-1312) who asserted control over large parts of Dalmatia, Slavonia and Bosnia during an internal conflict between the Árpád and Anjou ruling dynasties. Later, however, the Anjouvines intervened and scattered the Šubic family across the country (an important offspring being the Zrinski family), and later even selling the whole of Dalmatia to the Republic of Venice in 1409.

Main problems include massive structural unemployment followed by an insufficient amount of economic reforms. Of particular concern is the gravely backlogged judiciary system combined with inefficient public administration, especially involving land ownership.

The Constitutional Court (Ustavni sud) of the Republic of Croatia decides on the constitutionality of laws and has the right to repeal a law it finds unconstitutional. It also can impeach the president. The body is made up of 13 judges on 8-year term. The president of the Constitutional Court is elected by the court for a 4-year term

In an economy traditionally based on agriculture and livestock, peasants comprised more than half of the Croatian population until after World War II. Pre-1945 industrialization was slow and centered on textile mills, sawmills, brickyards, and food-processing plants.

A four-fold split of the province of Illyricum followed at the turn of the 4th century under Diocletian — an emperor of Illyrian descent, from Dalmatia. Other notable people from these areas in this period included the Christian Jerome, Saint Marinus (builder of San Marino), emperors Valentinian I and Valens, and Pope John IV.

The Croatian people trace their origins to Slavic peoples which moved into the territory of the former Roman provinces Pannonia and Dalmatia between the 7th and 8th centuries. No contemporary written records about these events have been preserved, especially not about the events as a whole and from the area itself. Instead, historians rely on records written several centuries after the facts, and even those records may be based on oral tradition.