The country was governed by the Council of Lieutenancy of Hungary (the Gubernium) – located in Pressburg and later in Pest – and by the Hungarian Royal Court Chancellery in Vienna.
The Hungarian government and Hungarian parliament were suspended after the Hungarian revolution of 1848, and were reinstated after the Austro-Hungarian Compromise in 1867.
Austria-Hungary consisted of two monarchies (Austria and Hungary), and one autonomous region: the Kingdom of Croatia-Slavonia under the Hungarian crown, which negotiated the Croatian–Hungarian Settlement (Nagodba) in 1868.
It was ruled by the House of Habsburg, and constituted the last phase in the constitutional evolution of the Habsburg Monarchy.
Foreign affairs and the military came under joint oversight, but all other governmental faculties were divided between respective states.The administration and government of the Kingdom of Hungary (until 1848–49 Hungarian revolution) remained largely untouched by the government structure of the overarching Austrian Empire.Hungary's central government structures remained well separated from the Austrian imperial government.The Austro-Hungarian Compromise of 1867 (called the Ausgleich in German and the Kiegyezés in Hungarian), which inaugurated the empire's dual structure in place of the former unitary Austrian Empire (1804–67), originated at a time when Austria had declined in strength and in power—both in the Italian Peninsula (as a result of the Second Italian War of Independence of 1859) and among the states of the German Confederation (it had been surpassed by Prussia as the dominant German-speaking power following the Austro-Prussian War of 1866).Other factors in the constitutional changes were continued Hungarian dissatisfaction with rule from Vienna and increasing national consciousness on the part of other nationalities (or ethnicities) of the Austrian Empire.After 1867, the Austrian and Hungarian customs union agreement had to be renegotiated and stipulated every ten years.