As one of the European "microstates", the Principality of Liechtenstein is often overlooked but its history is actually quite interesting--a brief overview of which I will try to present here.

The principality's territory has been inhabited since the 5th millennium B.C., though mainly at higher elevations because of the risk posed by the often-flooding Rhine. The first inhabitants, who were thought to be Ratians with Celtic influences, were conquered by the Romans in the year 15 B.C. and 'Raetia' was declared a Roman province. The Romans built a castle in Schann as late as the 4th century A.D. to defend against the Alemannians (Germans), who would eventually take over with the decay of the Roman Empire. In the 8th century, Raetia was included in the Franconian Empire and the Franconian shire constitution would be implemented in 806 under Charlemagne.

The Counts of Bregenz reigned over Raetia from the beginning of the 10th century, but they died out in 1152, after which Raetia would be split up by the sharing of inheritances among the Liechtenstein, Rohrauer, and Petroneller families. This sharing would eventually result in the emergence of the County of Vaduz in 1342, but more importantly, in 1396 Vaduz would be granted self-governance--the very foundation of modern Liechtenstein's sovereignty.

In 1608, the rulers of Liechtenstein were elevated to the rank of princes, but they still could not be admitted to the Council of Princes (the highest status they could aspire to), which required properties directly subordinated to the Emperor. Of course, other princes were in a similar situation, and so eventually Prince Johann Adam Andreas of Liechtenstein was able to purchase the Lordship of Schellenberg and the County of Vaduz in 1699 and 1712 respectively. In 1719, both dominions were together elevated to a principality that was given the name of the ruling family, Liechtenstein, even though they never resided there.

With the dissolution of the Old German Empire by Napoleon in 1806, the Rhine Confederation was established and Liechtenstein was accepted into it as a sovereign state. After Napoleon's defeat at Waterloo and the subsequent Vienna Congress of 1815, Liechtenstein was accepted into the German Confederation and was the only small German state to maintain its independence. The revolutions of 1848 set in motion demands for a new constitution and free elections, but the status quo would remain until Austria withdrew from the German Confederation after the Austrian-Prussian War--consequently meaning that Liechtenstein would also withdraw due to prior agreements with Austria. Liechtenstein officially became independent in 1866.

During World War I Liechtenstein was officially neutral, but due to its links with Austria it was treated as an ally of Germany and therefore suffered sanctions. Because of this, after the war it severed its ties with Austria and worked on forming new ones with Switzerland--guarantors of Liechtenstein's neutrality.

In 1938 the local Nazi party attempted to take power by signalling to a nearby German tank column just across the border in Austria, but citizens resisted and for some reason¹ the tanks pulled back. Fortunately Liechtenstein escaped bombing of any kind, but unfortunately--despite its neutrality--once again its citizens would be treated by others as "Germans", resulting in persecution (by the Benes Decrees in Czechoslovakia, for example).

Liechtenstein experienced an economic boom after the war and quickly converted from a primarily agrarian society to a completely modern one. Today, the country is known for its specialized industrial firms and its status as an international banking centre.

To learn more about this tiny country, check out:

http://www.liechtenstein.li/

gn0sis says:

But you must point out that "specialized industry" in Liechenstein's case essentially means Ivoclar AG -- a manufacturer of denture adhesive!