The new dual system of order drew its potential from the ongoing evolution of the patrimonial principalities of the feudal era into territorially-defined, institutionalized states. Among historians, this most German creation has long stood as a hallmark of early modern German history. The Empire possessed bounded lands identified with the ruling dynasty (the Habsburgs were also called the “House of Austria”); territorial impartibility among the male members of the dynasty; an internal sovereignty limited, if at all, only by the territorial parliament; the power to create new laws (statutes); and at least the rudiments of a fiscal, judicial, and administrative bureaucracy. Two additional things helped to restrain the dynasties from making the Empire a hub of inter-dynastic wars: the vast network of inter-dynastic marriages and the rise of the princes’ corporate power through the Imperial Diet. They promoted a strong aristocratic culture of arbitration and negotiation of differences and thereby encouraged the growth of stability in Imperial public life.
Like many other innovations, the princely territorial state appeared earlier as an idea than a reality. Nearly 150 years before the reform of Austrian governance began under Maximilian I, a document was drafted that anticipated the outlines of a semi-sovereign dynastic state. Purporting to be a twelfth-century Imperial charter instead of what it was, a fourteenth-century Austrian forgery, the Privilegium Maius sketched with some accuracy the characteristics of a largely autonomous, semi-sovereign territorial state. It declared the “archdukes” to be exempt from Imperial service and judicial authority, and it specified primogeniture and the indivisibility of lands. By around 1500, when territorial polities vaguely resembling this ideal were beginning to appear, their princes were nevertheless commonly bound at least to consult their leading subjects gathered in parliamentary bodies. The territorial parliament [Landtag] was notably strong in the southwestern territory of Württemberg, where the nobles were mostly free of ducal authority and the towns relatively strong but modest in size. The Treaty of Tübingen of 1514 reveals how strongly the parliament could assert its will in times of political crisis. It endured as a kind of written constitution for the duchy of Württemberg until 1805. The give-and-take bargaining between prince and estates followed customary rules, which in some states were eventually set down in writing, as can be seen in the procedural rules for the territorial parliament of Electoral Saxony in the second half of the sixteenth century. The other side of territorialization involved the creation of a central administrative apparatus and rules for the regime’s administration and judiciary. The result was the formation of bureaucracies staffed by educated (or at least trained) officials who were organized into offices and colleges possessing functionally distinct competencies. This process spread from south to north.