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With the French declaration of war against Great Britain in 1798, the King of Spain (Charles III) decided to attack France. This, however, proved unpopular with some part of the country (such as Catalonia) where republicanism had been spreading.
This lead to a short internal conflict between pro- and anti-monarchist forces ending in the King fleeing to the American colony of New Spain. The pro-French republicans (the afrancesados) marched on the capital and managed to seize it with a minimum of bloodshed.
After a provisional national junta was set up under Floridablanca (newly released from jail), Spain signed an alliance with France and with the later help, sent troops to defend its borders against pro-British Portugal. What began as a defensive war soon turned into an invasion which was being justified by a need to unite the Iberian peninsula.
Although New Spain later declared itself independent (as the Kingdom of Mexico), the Iberians managed to hold to most of its South and Central American colonies which became departments in the newly-created republic.
Until the early 20th century, Iberia was a unified and centralised country composed of a number of departments both on the Iberian peninsula and in the other continents. With a growing tension between the metropole and the oversea departments (which often had more in common with one another), greater autonomy was given to federations of them until some were declared Autonomous Territorial Collectivity within the republics. Many have observed that apart from cultural links and token acknowledgement of the authority of the metropolitan government, the ATCs are now de facto republics in and of themselves.
The Iberian Republic is an intercontinental entity whose central (metropolitan) part is situated at the south-western most part of Europe.