The institution of Parliament was created by the absolutist Constitution of 1818. The two estates - the clergy and the municipalities - obtained the right to be represented by delegates. Three priests represented the clergy in Parliament, while the municipalities were represented by the 11 municipal heads and the treasurers of the municipal funds.
This parliament of the estates was convened by the Reigning Prince to a meeting once a year. It possessed no rights of any kind; its function consisted solely in assenting “with gratitude” to the annual demand for taxes.

Constitution of 1862
The history of Liechtenstein's parliamentarianism begins with the Constitution of 1862. Parliament became a genuinely representative body of the people largely constituted through free elections.
The number of Members was reduced to 15: Three Members were appointed by the Reigning Prince and twelve were elected indirectly by the people. The men in each municipality, who were solely eligible to vote, elected two electors for every 100 inhabitants. These electors then elected the Members of Parliament at an electoral meeting.
Parliament now had the right to participate in the most important, if not all, functions of the State: the right to participate in the legislative process, the right to approve important international treaties, the right to approve taxes (fiscal authority), the right to supervise the State administration, and the right to participate in military recruitment.

Election Districts
The two historical districts of the country were abolished during the absolute monarchy.
Although the subjects ardently opposed their abolition, the Constitution of 1862 also did not reverse the creation of a unitary State. During the so-called coinage turmoil of 1877, in which the inhabitants of the Lower Country fought energetically against the introduction of the gold standard, the conflict flared up again.
In 1878, the country was divided into two election districts, based on the earlier judicial districts: Seven Members of Parliament were now elected from the Upper Country election district, five from the Lower Country election district. In addition, the Reigning Prince appointed two Members from the Upper Country and one Member from the Lower Country. The new Constitution of 1921 introduced direct popular elections; the total number of 15 Members and the 60:40 ratio between the Upper and the Lower Country remained the same.
This ratio was also retained in 1988 when the number of Members was increased to 25, although the ratio no longer corresponded to the number of inhabitants in the two election districts.

Constitution of 1921
The Constitution of 1921 placed the State of Liechtenstein on a new foundation. The monarchic and the democratic principle balance each other as equals. Many functions of the State can only be exercised if different organs of the State cooperate.
A fundamental innovation compared to the Constitution of 1862 was the notion that the State rests on a “democratic and parliamentary basis”. The people attained far-reaching direct-democratic rights. The Reigning Prince renounced the right to appoint three Members of Parliament, i.e., Parliament became a pure representation of the people.

The rights of Parliament were expanded considerably:
Since entry into force of the 1921 Constitution, the Government has been formed through cooperation between the Reigning Prince and Parliament; Parliament recommends the appointment of the Ministers. Election of judges by Parliament was also introduced.

Secret and direct elections were introduced only in 1918. Since then, the Members of Parliament have been elected by the voting population. Until 1939, the elections were conducted according to the first-past-the-post (majority) system. In view of the threat from abroad, the feuding political parties agreed on a truce shortly before the Second World War, resulting in a switch to the system of proportional representation.