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The Formation of Germany under Bismarck until his Resignation in 1890: Until the 1860’s, Germany was a loose collection of States with little power. King Wilhelm I and his Prime Minister Otto von Bismarck ruled Prussia, the most powerful of the German states. It was Prussia who had an ambition to rule all of the German states, and in 1864, the first off three wars was fought against the minor states Schleswig and Holstein. Next, in 1866, Prussia overwhelmed Austria, the second largest state in six weeks, resulting in the North German Confederation that united all of northern Germany under Pruss