The Habsburg Empire, the territory which would later become Austria-Hungary, held power from 1273 through 1918. Their rule covered most of central Europe, including Hungary, the Czech lands, Croatia, Slovenia, Slovakia, and Austria. They remained very powerful, and through a series of marriages, ascended to the Spanish monarchy in 1516. The acquisition of Spanish territories lasted until the War of Spanish Succession, which lost the Habsburgs the Spanish territories, largely due to a weakening of the lineage caused by inbreeding.
In the 16th century, the Austrian Habsburgs became very strong, managing to acquire parts of the Netherlands and northern Italy. When Charles IV died in 1740, the War of Austrian Succession began because he did not leave a single male heir to the throne. A male heir was never decided upon, so his (very liberal) daughter, Maria Therese took the throne. She was succeeded by her son, Joseph II. He was also very liberall and imposed many civil reforms, however was considered too hasty by his subjects, and eventually replaced in 1790.
Rising nationalism in the 19th and 20th century is considered a defining factor in the fall of the Habsburgs. The multinational territory was not in line with the changing climate in Europe. Nations began to desire independence and therefore no longer wanted to be associated with a multinational empire. World War I marked the end of the Habsburg Empire. While the surrounding countries were all declaring independence as a result of the War, all that was left to the Habsburgs was Austria and Hungary; a much smaller territory than formerly under Habsburg control. As a result, Emperor Charles issued a statement in November of 1918 recognizing Austria’s right to to determine the future of the state, and stepped down from having any shares in the state. He did not, however, renounce his hereditary titles for himself or any of the Habsburg Dynasty. This led to the national assembly of the Austrian Republic passing the “Habsburg Law” in 1919. This new law banished all members of the Habsburg family from Austrian territory, unless they agreed to renounce all dynastic notions and accept the status of a private citizen. This new law in 1919 also removed all property rights from the Habsburgs. They were reinstated in 1935, but again withdrawn under Hitler in 1938. Following World War II, the Allied Control Council in Austria made a commitment to support the Austrian government in preventing any return of the Habsburgs, and the law of 1919 was incorporated into the Austrian State Treaty in 1955.
Archduke and head of the Habsburgs, Otto von Habsburg, applied to return to Austria as a private citizen in 1961. It was initially declined, but later ruled legal and accepted in 1963. However due to Socialist opposition, he was not actually granted a visa until 1966. Chancellor Bruno Kreisky helped better the relations between the Habsbugs and Austria, though some family members continued to demand Habsburg assets be restored. Archduke Otto von Habsburg, the last heir to the Habsburg Empire, died in 2011 at the age of 98.
Epic World History: http://epicworldhistory.blogspot.com/2012/06/habsburg-dynasty.html