Austria-Hungary was ruled by the House of Habsburg and constituted the last phase in the constitutional evolution of the Habsburg Monarchy. From 1878 Austria-Hungary jointly governed Bosnia-Herzegovina, which it annexed in 1908. A third component of the union was the Kingdom of Croatia-Slavonia, an autonomous region under the Hungarian crown, which negotiated the Croatian–Hungarian Settlement in 1868. It was formed with the Austro-Hungarian Compromise of 1867 and was dissolved following its defeat in the First World War.Īt its core was the dual monarchy which was a real union between the Austrian Empire and the Kingdom of Hungary. Austria-Hungary, often referred to as the Austro-Hungarian Empire or the Dual Monarchy, was a constitutional monarchy and great power in Central Europe between 18.