Following the Northern Crusades, the Livonian Confederation emerged in 1228 as a loosely organized alliance of five entities: the Livonian Order, Archbishopric of Riga, and the bishoprics of Dorpat, Ösel-Wiek, and Courland. It encompassed present-day Latvia and Estonia, serving as both a defensive alliance to maintain German dominance and as a bulwark of Roman Catholicism against the expanding influence of Russian Orthodoxy. Although nominally divided between the church and the military order, the Livonian Order controlled much of the land, with power concentrated in the hands of German elites.
Economically, the Confederation flourished through trade with the Hanseatic League. Its ports, such as Riga, facilitated exports of grain, timber, furs, and wax to Western Europe, in exchange for luxury goods and metalware. However, local Latvians and Estonians remained largely disenfranchised, working as serfs on estates owned by German landowners. This separation allowed indigenous languages and customs to persist, despite the imposition of Christianity.
Governance within the Confederation was marred by internal conflicts among the Livonian Order, the bishops, and powerful merchant cities. In 1419, the Livonian Diet (Landtag) was established in Walk to resolve disputes, though cooperation among factions was often fragile. Despite its structure as a cooperative alliance, the Confederation primarily served German interests, with native populations subjected to exploitation.
The Confederation began to unravel during the Livonian War (1558–1582), as Russia, Poland-Lithuania, and Sweden vied for control of the Baltic. Weakened by internal tensions and the conversion of many knights to Lutheranism, the Livonian Order dissolved in 1561. Its last Grand Master, Gotthard Kettler, became the first Duke of the newly formed Duchy of Courland and Semigallia, which became a vassal of Poland-Lithuania. Meanwhile, Riga became a Free Imperial City, and other parts of the Confederation were divided between Poland-Lithuania and Sweden.
The Livonian War ended German control in the region and ushered in new struggles between Sweden, Poland-Lithuania, and Russia for dominance. Though the Confederation collapsed, the German-speaking elite maintained influence for centuries. The local Baltic people, now under new rulers, continued to face foreign domination, first by Poland-Lithuania and Sweden, and later by Russia, which solidified control after the Great Northern War (1700–1721).