Although performing a vastly different function, the Commonwealth is the successor of the British Empire. In 1884, whilst visiting Adelaide, South Australia, Lord Rosebery described the changing British Empire, as its former colonies became more independent, as a "Commonwealth of Nations". Conferences of British and colonial Prime Ministers had occurred periodically since 1887, leading to the creation of the Imperial Conferences in the late 1920s. The formal organisation of the Commonwealth developed from the Imperial Conferences, where the independence of the self-governing colonies and especially of Dominions was recognized, particularly in the Balfour Declaration at the Imperial Conference in 1926, when the United Kingdom and its dominions agreed they were "equal in status, in no way subordinate one to another in any aspect of their domestic or external affairs, though united by common allegiance to the Crown, and freely associated as members of the British Commonwealth of Nations". This relationship was eventually formalised by the Statute of Westminster in 1931.

After World War II, the Empire was gradually dismantled, partly owing to the rise of independence movements in the then-subject territories (such as that started in India under the influence of Mohandas Gandhi and Mohammad Ali Jinnah), and partly owing to the British Government's strained circumstances resulting from the cost of the war. The word "British" was dropped in 1946 from the title of the Commonwealth to reflect the changing position. Burma (1948), and Aden (1967) are the only former colonies not to have joined the Commonwealth upon independence. Among the former protectorates and mandates, Egypt (1953), Israel (1948), Iraq (1932), Bahrain (1971), Qatar (1971), United Arab Emirates (1971), Jordan (1946), Kuwait (1961) and Oman (1971) never became members of the Commonwealth. The Republic of Ireland was a member but left the Commonwealth upon becoming a republic in 1949. However, the Ireland Act 1949 was passed by the Parliament of Westminster and gave citizens of the Republic of Ireland a status similar to that of other citizens of the Commonwealth in UK law.

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