In 1993, their unofficial leader Josip Manolić, former protégé of President Franjo Tuđman, had been demoted and was becoming increasingly marginalized, while Gojko Šušak, the powerful defense minister and leader of the hardline nationalist faction, was winning Tuđman's favour.
Soon, he was joined by the speaker Stjepan Mesić and two of them announced a split from HDZ and the formation of a new party.
They accused Tuđman of embracing authoritarianism, extreme nationalism and irredentist policies towards Bosnia and Herzegovina, which was, in their mind, a betrayal of the founding principles of HDZ.
For a while, it looked that HDZ would ultimately lose parliamentary majority, but Tuđman, in the end, managed to keep number of the moderates in line, thus maintaining and later solidifying his grip on power.
In the 1995 parliamentary elections, it became apparent that HND didn't attract many of HDZ voters, while those already opposed to Tuđman overwhelmingly preferred the established opposition parties.