Emperor Franz Joseph I appointed him to the position in order to obstruct strong Croatian resistance to dualism established by the Austro-Hungarian Compromise of 1867 thus preserving the Austrian sovereignty and Empire from possible breakdown.

[4] The almost 20-year long Khuen-Héderváry's reign became referred to in Croatia as "khuenovština", meaning the type of governance characterized by political arbitrariness, violence, persecution of opponents and corruption.

The basic task of Khuen-Héderváry was to carry out a policy consistent with Emperor Franz Joseph's demands, not wanting to touch into empires' dualism.

The main goal of favouring the Serbs was to encourage inter-ethnic (Croat/Serb) conflicts which would lead to the preventing of resistance against the Empires' state policies.

The elections were held under the police supervision and slogan "Keeping Order and Peace" which added to the atmosphere of constant pressure, while the authorities did not hesitate to use force so that even murders were happening.

In spite of his initial views, he realized that the construction of the theater would have shown the emperor that Croatian nationalism waned and that he managed to "calm" the Kingdom.

On that day, groups of pupils and students held protests during which they burned the Hungarian flag beneath Josip Jelačić's monument.

[13] Regardless of Khuen-Héderváry's harsh rule, Croatian economy experienced a slight growth due to Izidor Kršnjavi and Josip Juraj Strossmayer's activities.

By increasing agricultural production, steam mills (one, Hinko in Nuštar, was founded by Khuen-Héderváry's brother Heinrich II), breweries and cheese factories were established.

The most intense was the one held in Zaprešić on which police officers shoot peasants who dissatisfied with the ban's behaviour burnt the Hungarian flag and smashed all the windows on the local railway station building.

When the Emperor realized that Khuen Héderváry no longer had any influence in Croatia, he removed him from office and appointed him on 23 June 1903 to the position of Prime Minister of Hungary.

At the beginning of the World War I, he stated that the idea of creation of Yugoslavia from the Croatian point of view was inappropriate due to the Serb question and that the solution for Bosnia and Herzegovina's status was in its annexation to Hungary.

He faced the greatest difficulty on 16 October 1902, when the Minister of Defence, Géza Fejérváry tabled a bill in the House of Representatives about the conscription of 20 thousands reservists.

Against this proposal of the defence minister, the opposition, led by the Independence Party, launched an endless obstruction under the slogan of "no more soldiers without the introduction of Hungarian as the language service and command".

On 23 May 1903, King Francis Joseph authorised Károly Khuen-Héderváry, ban of Croatia, to initiate negotiations among the Hungarian politicians about the prospects of forming a new government.

Consequently, the ruler asked István Tisza on 16 June to agree as future prime minister with the politicians of the Liberal Party about the composition of the government.

But the members of the governing party, fearing that Tisza would eventually break down the obstruction with violent means, refused to assume the ministerial posts offered to them one after the other.

Soon after the new Khuen-Héderváry cabinet was appointed on 27 June 1903, they realized at the time of its introduction at parliament that a great part of the opposition representatives would continue their obstruction and make parliamentary work impossible.

Although no direct evidence was found against the prime minister in the case of bribery, the ensuing scandal made even those opposition representatives return to the camp of obstruction who had so far respected their agreement with Khuen-Héderváry.