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This acquisition was legalized by the Treaty of Nystad in which the Baltic Dominions were ceded to Russia.The treaty also granted the Baltic-German nobility within Estonia and Livonia the rights to self-government, maintaining their financial system, existing customs border, Lutheran religion, and the German language; this special position in the Russian Empire was reconfirmed by all Russian Tsars from Peter the Great to Alexander II.After victory in the Polish–Lithuanian–Teutonic War, the Polish–Lithuanian union became a major political power in the region.In 1558 Livonia was attacked by the Tsardom of Russia and the Livonian war broke out, lasting until 1583.In the late 19th century, nationalist sentiment grew in Estonia and in Latvia morphing into an aspiration to national statehood after the 1905 Russian Revolution.After the First World War the term "Baltic States" came to refer to countries by the Baltic sea that had gained independence from Russia in its aftermath.As such it included not only former Baltic governorates, but also Latgale, Lithuania and Finland.

Endre Bojtár (1999) argues that it was around the 1840s when the German gentry of the Governorate of Livonia devised the term "Balts" to mean themselves, the German upper classes of Livonia, excluding the Latvian and Estonian lower classes.In the aftermath of the Livonian crusade, a crusader state officially named Terra Mariana, but also known as Livonia, was established in the territory of modern Latvia and Southern Estonia.It was divided into four autonomous bishoprics and lands of the Livonian Brothers of the Sword.Initially these were two governorates named after the largest cities: Riga and Reval (now Tallinn).After the Partitions of Poland which took place in the last quarter of the 18th century, the third Ostsee governorate was created, as the Courland Governorate (presently a part of Latvia).

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