[2][3][4] Royal Hungary was the symbol of the continuity of formal law[5] after the Ottoman occupation, because it could preserve its legal traditions,[6] but in general, it was de facto a Habsburg province.

Temporary territorial division between the rival rulers John I and Ferdinand I occurred only in 1538, under the Treaty of Nagyvárad,[12] when the Habsburgs got the northern and western parts of the country (Royal Hungary), with the new capital Pressburg (Pozsony, now Bratislava).

In 1570, John Sigismund Zápolya abdicated as King of Hungary in Emperor Maximilian II's favor under the terms of the Treaty of Speyer.

[17] The Habsburg king directly controlled Royal Hungary's financial, military, and foreign affairs, and imperial troops guarded its borders.

Despite these enormous territorial and demographic losses, the smaller, heavily war-torn Royal Hungary had remained as economically important to the Habsburg rulers as the Austrian hereditary lands or the Bohemian crownlands even in the late 16th century.

[21] The Reformation caused rifts between Catholics, who often sided with the Habsburgs,[21] and Protestants, who developed a strong national identity and became rebels in Austrian eyes.

[21] As the Habsburgs' control of the Turkish possessions started to increase, the ministers of Leopold I argued that he should rule Hungary as conquered territory.

[citation needed] The repression of Protestants and the land seizures frustrated the Hungarians, and in 1703 a peasant uprising sparked an eight-year rebellion against Habsburg rule.

In practice, however, Charles and his successors governed almost autocratically, controlling Hungary's foreign affairs, defense, and finance but lacking the power to tax the nobles without their approval.

Charles also banned conversion to Protestantism, required civil servants to profess Catholicism, and forbade Protestant students to study abroad.

Centuries of Ottoman occupation and war had reduced Hungary's population drastically, and large parts of the country's southern half were almost deserted.

The nobles failed to use fertilizers, roads were poor and rivers blocked, and crude storage methods caused huge losses of grain.

Joseph II (1780–90), a dynamic leader strongly influenced by the Age of Enlightenment, shook Hungary from its malaise when he inherited the throne from his mother, Maria Theresa.

He decreed that German replace Latin as the kingdom's official language and granted the peasants the freedom to leave their holdings, to marry, and to place their children in trades.

Joseph's reforms outraged nobles and clergy of Hungary, and the peasants of the country grew dissatisfied with taxes, conscription, and requisitions of supplies.

Leopold died in March 1792 just as the French Revolution was about to degenerate into the Reign of Terror and send shock waves through the royal houses of Europe.

In 1795 the Hungarian police arrested Ignác Martinovics and several of the country's leading thinkers for plotting a Jacobin kind of revolution to install a radical democratic, egalitarian political system in Hungary.

The magnates, who also feared that the influx of revolutionary ideas might precipitate a popular uprising, became a tool of the crown and seized the chance to further burden the peasants.

This was especially demonstrated by the status of the Kingdom of Hungary, whose affairs remained to be administered by its own institutions (King and Diet) as they had been under the composite monarchy, in which it had always been considered a separate Realm.

Road and waterway improvements cut transportation costs, while urbanization in Austria, Bohemia, and Moravia and the need for supplies for the Napoleonic Wars boosted demand for foodstuffs and clothing.

Hungary did not reap the full benefit of the boom, however, because most of the profits went to the magnates, who considered them not as capital for investment but as a means of adding luxury to their lives.

The wealthy magnates had little trouble balancing their earnings and expenditures, but many lesser nobles, fearful of losing their social standing, went into debt to finance their spending.

Poverty forced many lesser nobles to work to earn a livelihood, and their sons entered education institutions to train for civil service or professional careers.

As the number of lesser nobles who earned diplomas increased, the bureaucracy and professions became saturated, leaving a host of disgruntled graduates without jobs.

Grievances were voiced, and open calls for reform were made, including demands for less royal interference in the nobles' affairs and for wider use of the Hungarian language.

Szechenyi favored a strong link with the Habsburg Empire and called for the abolition of entail and serfdom, taxation of landowners, financing of development with foreign capital, the establishment of a national bank, and introduction of wage labor.

Szechenyi's reform initiatives ultimately failed because they were targeted at the magnates, who were not inclined to support change, and because the pace of his program was too slow to attract disgruntled lesser nobles.

He called for broader parliamentary democracy, rapid industrialization, general taxation, economic expansion through exports, and the abolition of privileges (equality before the law) and serfdom.

Some Hungarians held out hope for full separation from Austria; others wanted an accommodation with the Habsburgs, provided that they respected Hungary's constitution and laws.

Negotiations between the emperor and the Hungarian leaders were intensified and finally resulted in the Compromise of 1867, which created the Dual Monarchy of Austria-Hungary, also known as the Austro-Hungarian Empire.