It existed between 4 October and 10 November 1921, following the Treaty of Trianon and the departure of the rump Kingdom of Hungary's army and after the Sopron plebiscite was held in the area according to the Venice protocol.

The principal leaders of the state were Pál Prónay, Count Gyula Ostenburg-Moravek and former Hungarian prime minister István Friedrich.

Bánság refers to the lands held by a Ban (regional administrator), a word generally seen to be borrowed from Turkic languages by Slavs and used in Hungary and Croatia.

Geologist Hans Mohr of the technical college in Graz argued, in 1920, that: According to language, habits, origin, and faith, the inhabitants of Burgenland belong to us.

They are settlers originating from German core areas who, constituted as a kind of bold advanced guard, left the unfriendly mountains in the west behind them and migrated to [Burgenland's] fertile plains.

Because they have not lived with us in one unified political unit since then, the location and development of their true country can only be discovered through geographical investigations.

After the fall of the Hungarian Soviet Republic, Pál Prónay formed a small army of decommissioned officers and soldiers.

These soldiers were responsible for the torture and execution of left-wing figures and people in the Hungarian capital, Budapest, as well as the Central Hungarian countryside (known as the White Terror) in response to the actions of the Lenin Boys led by Tibor Szamuely (known as the Red Terror).

Many Habsburg legitimists wanted his return, especially in Western Hungary, which would lead to the foundation of the Karlist faction in Lajtabánság.

The Hungarian government hoped that they would be able to change the treaty and settle the hand-over by referendum, but their proposals were rejected by Austrian Chancellor Karl Renner multiple times.

In January 1921, the Austrian National Assembly agreed to integrate the newly granted West Hungarian territory into Austria as Burgenland, a new federal state ((Bundes)land).

The insurgents were civilians, replacing military caps with a hood, the rim of which was fastened to the top of the hat with a cockade in the national colors of Hungary.

The Rongyos Gárda consisted of peasants, college students, decommissioned military officers and Bosnian-Albanian Muslims who fought for the Kingdom of Hungary before Trianon (among them was Major Durics Hilmi Huszein, with nearly 300 associates).

The Hungarian forces fought a guerrilla war against the Austrians, making it virtually impossible for Austria to take the territory.

Horthy appointed Gyula Gömbös as a regional commander in Western Hungary, with the task of regulating the Rongyos Gárda.

Prónay's main goal was to implement the Sigray-Lingauer Plan, formulated by Count Antal Sigray according to which, if the Hungarian government agreed with Austria in renouncing Western Hungary, the rebels would create an independent state called the Lajub.

At the behest of the Prime Minister Count Bethlen, I urge the Lieutenant Colonel to leave the territory of Western Hungary immediately, which would be transferred to Austria under the Treaty of Trianon..

The government needed money, but there was little to hope for in tax collection, as the area declared self-sufficient was small and the rebels had already looted it.