The Galactic Republic was the name of the galactic government prior to the establishment of the Galactic Empire in 19 BBY. Although it was commonly known as the Old Republic, this was not so until the establishment of the Empire; its name when it existed was the Galactic Republic, or simply the Republic. Rarely, it was referred to as the First Republic. At times, the term Old Order was used to describe it.
The Republic, led by a Supreme Chancellor, had a supposedly democratic government that was able to sustain itself for over twenty-five thousand years. It is said that its complete history would "fill a thousand libraries".
In its latest years, it was a benevolent—though ineffectual—government tied up in layers of bureaucracy.
Traditionally, the Chancellor could only serve two four-year terms, but Palpatine stayed in office much longer, due to the prolonged Separatist Crisis.
The crisis occurred when several of the Republic star systems and commercial organizations, fed up with the corruption and widespread capitalism in the Republic, united in order to separate from the Republic. This unified front became known as the Confederacy of Independent Systems. Tensions between the Republic and the Separatists eventually escalated into all-out war after a Jedi strike team came to Geonosis, which started the Battle of Geonosis—and the Clone Wars.
The Senate granted Palpatine emergency powers to deal with the Separatist Confederacy in a motion introduced by the Naboo representative Jar Jar Binks. Palpatine's first move, widely supported at the time, was to create a vast army of clone warriors to serve as the Republic's fighting force against the Confederacy. The Republic had not previously needed an army, since until then any small conflicts within the Republic could be solved by recourse to the peacekeeping Jedi, or to local navies and militias. However, the fact that the Confederacy had access to an enormous army of droid soldiers required the Republic to construct a more formal federal military in order to effectively fight.
In the ensuing years, the Senate increasingly gave more power to Palpatine, who became the war's political Commander-in-Chief. Such actions were justified in the name of security, and eventually Palpatine did not need the approval of the Senate for many of his actions. Since the Chancellor held the loyalties of a vast majority of supporters in the Senate, this was considered a perfectly reasonable way to increase the wartime government's efficiency. The citizens of the Galaxy, who had long since lost faith in the the corrupt and inefficient Republic itself, came to see Palpatine personally as their protector from the droid armies and their terrible commander, General Greivous.