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Rapid industrialization and diversification occurred after World War II. Decentralization came in 1965, allowing growth of certain sectors, like the tourist industry. Profits from Croatian industry were used to develop poorer regions in the former Yugoslavia. This, coupled with austerity programs and hyperinflation in the 1980s, led to discontent in both Croatia and Slovenia that fueled the independence movement.

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.

Croatia is situated between central, southern and eastern Europe. It has a rather peculiar shape that resembles a crescent or a horseshoe which helps account for its many neighbours: Slovenia, Hungary, Serbian part of Serbia and Montenegro, Bosnia and Herzegovina, Montenegrin part of Serbia and Montenegro, and Italy across the Adriatic. Its mainland territory is split in two non-contiguous parts by the short coastline of Bosnia and Herzegovina around Neum.

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.

The Croatian Government (Vlada) is headed by the Prime minister who has 2 deputy prime ministers and 14 ministers in charge of particular sectors of activity. The executive branch is responsible for proposing legislation and a budget, executing the laws, and guiding the foreign and internal policies of the republic.

After the death of Domitar Zvonimir, Ladislaus I of Hungary was the strongest candidate for the throne, but the Croatian lords struggled for independence from Hungary. Following the death of the last Croat king Petar Svacic in the defeat at the Gvozd hill in 1097 to Coloman of Hungary, they eventually recognized him as the common king for Croatia and Hungary in a treaty of 1102 (often referred to as the Pacta Conventa), thus making a personal union with Hungary. The two crowns would remain connected until the end of World War I.

Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialized area, with a per capita output perhaps one-third above the Yugoslav average. Privatization under the new Croatian Government had barely begun when war broke out. As a result of the Croatian war of independence, the economic infrastructure sustained massive damage in the period 1991-92.

The Hungarian king introduced a variant of the feudal system. Large fiefs were granted to individuals who would defend them against outside incursions thereby creating a system for the defence of the entire state. However, by enabling the nobility to seize more and more economic and military power, the kingdom itself lost influence to the Frankopan, Šubic, Nelipcic, Kacic, Kurjakovic, Draškovic, Babonic and other families.