After the disintegration of Kievan Rus in the 12th century, the city of Pskov with its surrounding territories along the Velikaya River, Lake Peipus, Pskovskoye Lake and Narva River became a part of the Novgorod Republic. It kept its special autonomous rights, including the right for independent construction of suburbs (Izborsk is the most ancient among them). Due to Pskov's leading role in the struggle against the Livonian Order, its influence spread significantly. The long reign of Daumantas (1266-99) and especially his victory in the Battle of Rakovor (1268) ushered in the period of Pskov's actual independence. The Novgorod boyars formally recognized Pskov's independence in the Treaty of Bolotovo (1348), relinquising their right to appoint the posadniks of Pskov. The city of Pskov remained dependent on Novgorod only in ecclesiastical matters until 1589, when a separate bishopric of Pskov was created and the archbishops of Novgorod dropped Pskov from their title and were created "Archbishops of Novgorod the Great and Velikie Luki".
The Pskov Republic had well-developed farming, fishing, blacksmithing, jeweler’s art, and construction industry. Exchange of commodities within the republic itself and its trade with Novgorod and other Russian cities, the Baltic region, and Western European cities made Pskov one of the biggest handicraft and trade centers of Rus. As opposed to Novgorod Republic, Pskov never had big feudal landowners, whose estates were smaller and even more scattered than of those in Novgorod. The estates of Pskovian monasteries and churches were much smaller, as well. The social relations that had taken shape in the Pskov Republic were reflected in the Legal Code of Pskov. Peculiarities of the economy, centuries-old ties with Novgorod, frontier status, and military threats led to the development of the veche system in the Pskov Republic. The knyazs played a subordinate role. The veche elected posadniks and sotskiys (сотский - initially, an official who represented a hundred households) and regulated the relations between feudals, posad people, izborniks (изборник - elected officials), and smerds (peasants). The boyar council had a special influence on the decisions of the veche, which gathered at the Trinity Cathedral. The latter also held the archives of the veche and important private papers and state documents. The elective offices became a privilege of several noble families. During the most dramatic moments in the history of Pskov, however, the so called "molodshiye" posad people (молодшие посадские люди, or low-ranking posad officials) played an important and, at times, decisive role in the veche. The struggle between the boyars and smerds, "molodshiye" and "bolshiye" posad people (high-ranking posad officials) was reflected in the heresy of the Strigolniki in the 14th century and veche debates of the 1470s-1490s, which often ended with bloody clashes.
The strengthening of ties with Moscow, caused by economic development and foreign policy objectives, Pskov’s participation in the Battle of Kulikovo in 1380, and successful joint struggle against the Teutonic Knights and Lithuanian feudals offered conditions for elimination of the independence of the Pskov Republic. Some of the Pskovian boyars and merchants tried to oppose the unification with Moscow, but the citizens didn’t support them.
In 1510, Grand Prince of Moscow Vasili III arrived in Pskov and pronounced it his votchina, thus, putting an end to the Pskov Republic. The veche was dissolved and some 300 families of rich Pskovians were sent away from the city. Their estates were distributed among the Muscovite service class people. From that time on, the city of Pskov and the lands around it continued to develop as a part the centralized Russian state, preserving some of its economic and cultural traditions.
The downfall of Pskov is recounted in the Muscovite Story of the Taking of Pskov (1510), which was lauded by D.S. Mirsky as "one of the most beautiful short stories of Old Russia. The history of the Muscovites' leisurely perseverance is told with admirable simplicity and art. An atmosphere of descending gloom pervades the whole narrative: all is useless, and whatever the Pskovites can do, the Muscovite cat will take its time and eat the mouse when and how it pleases"..