Following defeat at the Battle of Austerlitz by the French under Napoleon in December 1805, Holy Roman Emperor Francis II abdicated, and the Empire was dissolved on 6 August 1806.

The resulting Treaty of Pressburg established the Confederation of the Rhine in July 1806, joining sixteen of France's allies among the German states (including Bavaria and Württemberg).

In June 1814, the famous German patriot Heinrich vom Stein created the Central Managing Authority for Germany (Zentralverwaltungsbehörde) in Frankfurt to replace the defunct Confederation of the Rhine.

The German Confederation was created by the 9th Act of the Congress of Vienna on 8 June 1815 after being alluded to in Article 6 of the 1814 Treaty of Paris, ending the War of the Sixth Coalition.

In addition, the Diet oversaw the construction and maintenance of several German Federal Fortresses and collected funds annually from the member states for this purpose.

In that same year, it was decided that a common symbol for the Federal Army should be the old Imperial two-headed eagle, but without crown, scepter, or sword, as any of those devices encroached on the individual sovereignty of the states.

The late 18th century was a period of political, economic, intellectual, and cultural reforms, the Enlightenment (represented by figures such as Locke, Rousseau, Voltaire, and Adam Smith), but also involving early Romanticism, and climaxing with the French Revolution, where freedom of the individual and nation was asserted against privilege and custom.

However, the defeat of Napoleon enabled conservative and reactionary regimes such as those of the Kingdom of Prussia, the Austrian Empire, and Tsarist Russia to survive, laying the groundwork for the Congress of Vienna and the alliance that strove to oppose radical demands for change ushered in by the French Revolution.

With Austria's position on the continent now intact and ostensibly secure under its reactionary premier Klemens von Metternich, the Habsburg empire would serve as a barrier to contain the emergence of Italian and German nation-states as well, in addition to containing France.

By the time of the Napoleonic Wars, Prussia, grounded in the virtues of its established military aristocracy (the Junkers) and stratified by rigid hierarchical lines, had been surpassed militarily and economically by France.

After 1807, Prussia's defeats by Napoleonic France highlighted the need for administrative, economic, and social reforms to improve the efficiency of the bureaucracy and encourage practical merit-based education.

Inspired by the Napoleonic organization of German and Italian principalities, the Prussian Reform Movement led by Karl August von Hardenberg and Count Stein was conservative, enacted to preserve aristocratic privilege while modernizing institutions.

Outside Prussia, industrialization progressed slowly, and was held back because of political disunity, conflicts of interest between the nobility and merchants, and the continued existence of the guild system, which discouraged competition and innovation.

The breakdown of the competition was, roughly, the emerging capitalist bourgeoisie and petit-bourgeoisie (engaged mostly in commerce, trade, and industry), and the growing (and increasingly radicalized) industrial working class; and the other side associated with landowning aristocracy or military aristocracy (the Junkers) in Prussia, the Habsburg monarchy in Austria, and the conservative notables of the small princely states and city-states in Germany.

In a multi-national polyglot state in which Slavs and Magyars outnumbered the Germans, the prospects of Czech, Slovak, Hungarian, Polish, Serb, or Croatian sentiment along with middle class liberalism was certainly horrifying to the monarchist landed aristocracy.

Metternich used the murder as a pretext to issue the Carlsbad Decrees of 1819, which dissolved the Burschenschaften, cracked down on the liberal press, and seriously restricted academic freedom.

When the German Empire was established in 1871, the nobility controlled the army and the Navy, the bureaucracy, and the royal court; they generally set governmental policies.

[b] Peasant leaders supervised the fields and ditches and grazing rights, maintained public order and morals, and supported a village court which handled minor offenses.

In 1834, the Prussian regime sought to stimulate wider trade advantages and industrialism by decree – a logical continuation of the program of Stein and Hardenberg less than two decades earlier.

[23] Inadvertently, these reforms sparked the unification movement and augmented a middle class demanding further political rights, but at the time backwardness and Prussia's fears of its stronger neighbors were greater concerns.

In turn, German industry (especially the works established by the Krupp family) introduced the steel gun, cast-steel axle, and a breech-loading rifle, exemplifying Germany's successful application of technology to weaponry.

The crucial factor enabling Prussia's conservative regime to survive the Vormärz era was a rough coalition between leading sectors of the landed upper class and the emerging commercial and manufacturing interests.

While the Zollverein brought economic progress and helped to keep the bourgeoisie at bay for a while, it increased the ranks of the middle class swiftly – the very social base for the nationalism and liberalism that the Prussian state sought to stem.

The Zollverein was a move toward economic integration, modern industrial capitalism, and the victory of centralism over localism, quickly bringing to an end the era of guilds in the small German princely states.

On 15 March 1848, the subjects of Friedrich Wilhelm IV of Prussia vented their long-repressed political aspirations in violent rioting in Berlin, while barricades were erected in the streets of Paris.

Friedrich Wilhelm gave in to the popular fury, and promised a constitution, a parliament, and support for German unification, safeguarding his own rule and regime.

As in Austria and Russia, this middle-class assertion increased authoritarian and reactionary sentiments among the landed upper class, whose economic position was declining.

His document concentrated real power in the hands of the King and the upper classes, and called for a confederation of North German states – the Erfurt Union.

Austria and Russia, fearing a strong, Prussian-dominated Germany, responded by pressuring Saxony and Hanover to withdraw, and forced Prussia to abandon the scheme in a treaty dubbed the "humiliation of Olmütz".

Bismarck told the Diet, "The great questions of the day are not decided by speeches and majority votes ... but by blood and iron" – that is, by warfare and industrial might.