This general overview of Monaco's political system isn't intended to be an in-depth analysis. The official government portal and related departmental websites provide much more information, and we've provided links throughout the text to them.
Before the 20th century, the Princes of Monaco governed the Principality with absolute power, but in January 1911 Albert I put in place the foundations of the present day constitutional monarchy. He proclaimed a charter establishing a parliament, whose members would be elected by the Monegasque people. Monaco's parliament, or National Council, was able to vote on the laws that the prince proposed.
The first charter didn't last very long and was suspended, along with the parliament, shortly after the outbreak of World War 1. A revised charter was established in 1917 and remained in place until 1959, when work began on a complete revision. Finally, in 1962, Rainier III proclaimed the constitution of Monaco, setting out the liberties and rights of the Monegasque people, and since then the Principality has been governed as a constitutional monarchy.
The Grimaldi name first became linked with Monaco in 1297 when Francois and Rainier Grimaldi seized control of the Rock and its port. Over the course of the following 700 years, the Principality has been protected periodically by France, Italy or Spain depending on the politics of the time, but the ruling family has always been the Grimaldi.
The current prince, HSH Prince Albert II succeeded his father Rainier III in 2005. He's the highest authority in the Principality, but exercises his power within the limits of the constitution and laws. Changes to either of these are proposed by the Prince and need the agreement of the National Council. Albert II is represented by his Minister of State in the day to day government of the Principality, except in matters of foreign relations, for which the Prince himself retains responsibility.
Prince Albert has stated that "environmental policy is at the core of my priorities", and this is certainly reflected both internally and in international relations. Prestigious activities such as the Monaco Yacht Show are carbon neutral, and the Principality now publishes its GDP in order to be able to contribute to the United Nations Millennium Development Goals. The Prince Albert II of Monaco Foundation was also set up "to protect the environment and to encourage sustainable development".
The Government is responsible for day to day state administration, led by a Minister of State chosen by the Prince. The position was created in 1911, and up to 2002 it had to be filled by a French national. That year, the constitution was revised to enable the Minister of State's position to be filled by a Monegasque.
Five government counselors assist the Minister of State, and each one is in charge of a department. These are listed below, with their major areas of responsibility.
In addition to the 5 departments, the General Secretariat of the Ministry of State coordinates activities, liaises with various councils, and is in charge of civil service expenditure, personnel, legal affairs, press relations, IT services, official communication and archives.
The National Council (Conseil National) is the parliament of Monaco whose members are elected by the Monegasque people every 5 years. The 2008 election was won by the coalition party UPM, which took the majority of seats, while R&E took just 3.
Monaco's local government is administered by the Municipal Council, elected by the Monegasque people for a period of 4 years. The 15 members of the council, headed by the mayor, make decisions on public works, construction, public parks, traffic and so on.