The name Albania is derived from an ancient Illyrian tribe, the Albanoi, forbears of the modern Albanians. The Albanian name for their country is Shqiperia.
Prior to the 20th century, Albania was subject to foreign domination except for a brief period (1443-78) of revolt from Ottoman rule. Albania declared its independence during the first Balkan War in 1912 and remained independent after the World War I largely through the intercession of U.S. President Woodrow Wilson at the Paris Peace Conference.
In 1939, Italy under Benito Mussolini annexed Albania. Following Italy's 1943 surrender to Allied Powers during World War II, German troops occupied the country. Partisan bands, including the communist-led National Liberation Front (NLF), gained control in November 1944 following the German withdrawal. Since Yugoslav communists were instrumental in creating the Albanian Communist Party of Labor in November 1941, the NLF regime, led by Enver Hoxha, became a virtual satellite of Yugoslavia until the Tito-Stalin split in 1948. Subsequently, Albania's hardline brand of communism led to growing difficulties with the Soviet Union under Nikita Krushchev, coming to a head in 1961 when the Soviet leaders openly denounced Albania at a party congress. The two states broke diplomatic relations later that year; however, Albania continued nominal membership in the Warsaw Pact until the 1968 invasion of Czechoslovakia.
In 1945, an informal United States mission was sent to Albania to study the possibility of establishing relations with the NLF regime. However, the regime refused to recognize the validity of prewar treaties and increasingly harassed the U.S. mission until it was withdrawn in November 1946. The U.S. maintained no contact with the government of Albania between 1946 and 1990.
During the 1960s, China emerged as Albania's staunch ally and primary source of economic and military assistance. However, the close relationship faltered during the 1970s when China decided to introduce some market reforms and seek a rapprochement with the U.S. After years of rocky relations, the open split came in 1978 when the Chinese Government ended its aid program and terminated all trade. Hoxha, still communist dictator, opted to pursue an isolationist course. The result was financial ruin for Albania.
By 1990, changes elsewhere in the communist bloc began to influence thinking in Albania. The government began to seek closer ties with the West in order to improve the economic conditions in the country. The People's Assembly approved an interim basic law in April 1991. Short-lived governments introduced initial democratic reforms throughout 1991. In 1992, the victorious Democratic Party government under President Sali Berisha began a more deliberate program of market economic and democratic reform. Progress stalled in 1995, however, resulting in declining public confidence in government institutions and an economic crisis spurred on by the proliferation and collapse of several pyramid financial schemes. The implosion of authority in early 1997 alarmed the world and prompted intense international mediation and pressure. Early elections held in June 1997 led to the victory of a socialist-led coalition of parties, which remains in power today.