History of Austria
Austria was dominated by the House of Habsburg and House of Habsburg-Lorraine ("Haus Österreich") from 1273 to 1918. In 1808, when Emperor Francis II of Austria dissolved the Holy Roman Empire, Austria became the Austrian Empire, and was also part of the German Confederation until the Austro-Prussian War of 1866. In 1867, Austria formed a dual monarchy with Hungary: the Austro-Hungarian Empire (1867–1918). When this empire collapsed after the end of World War I in 1918, Austria was reduced to the main, mostly German-speaking areas of the empire (its current frontiers), and adopted the name The Republic of German-Austria. However the union and name were forbidden by the Allies at the Treaty of Versailles. This led to the creation of the First Austrian Republic (1918-1933).
Austrians
The Franco-Prussian War and the establishment of a German Empire in 1871, headed by Prussia and pointedly excluding any of the Austrian lands, let the state turn away from Germany and turn its gaze towards the Balkan Peninsula. Thereby the influence of pan-Germanism was diminished in the Habsburg territories, but as the term "Austrians" still was used supra-national, German-speaking Austrians considered themselves Germans (and were counted as such in the censuses). After Bismarck had excluded Austria from Germany, many Austrians faced a dilemma about their identity which prompted the Social Democratic Leader Otto Bauer to state that the dilemma was "the conflict between our Austrian and German character." The state as a whole tried to work out a sense of a distinctively Austrian identity.