After Sultan Agung, the Sultanate of Mataram was declining due to power struggle within the sultanate. To make things worse, VOC (Dutch East India Company) exploited the power struggle to increase its control. At the peak of the conflict, the Mataram Sultanate was split in two based on the Treaty of Giyanti of 13 February 1755: Yogyakarta Sultanate and Surakarta Sunanate.
The Giyanti Treaty mentioned Pangeran Mangkubumi as Sultan of Yogyakarta with the title of Sampeyan Dalem Ingkang Sinuwun Kanjeng Sultan Hamengkubuwono Senopati Ingalaga Abdul Rakhman Sayidin Khalifatullah Panatagama (His Majesty the Sultan, Commander in the Battlefield, Servant of the Most Gracious, Cleric and Caliph that Safeguards the Religion).
During the era of Dutch occupation there were two principalities, the Yogyakarta Sultanate (Kasultanan Yogyakarta) and the smaller PakualamanDuchy / Principality (Kadipaten Pakualaman).
The Dutch Colonial Government arranged for the carrying out autonomous self-government, arranged under a political contract. When the Indonesian independence was proclaimed, the rulers, the Sultan of Yogyakarta and Prince of Pakualaman made a declaration they would become part of the Republic of Indonesia. Those two regions were unified to form the Yogyakarta Special Region and the sultan became the Governor of Yogyakarta and the Prince of Pakualaman as the vice-governor; both were responsible to the President of Indonesia. The Special Region of Yogyakarta was created after the independence war ended and legalised on 3 August 1950.
In carrying out the local government administration it considers three principles: decentralisation, deconcentration and assistance. The provincial government carries out the responsibilities and authorities of the central government, while on other hand carrying out its autonomous responsibilities and authorities. The Regional Government consists of the Head of the Region and the Legislative Assembly of the Region. Such construction guarantees good co-operation between the Head of Region and the Legislative Assembly of Region to achieve a sound regional government administration. The Head of the Special Region of Yogyakarta has got responsibility as the Head of the Territory and titled as a Governor.
The first Governor was the late Hamengkubuwono IX, Sultan of Yogyakarta and continued by HRH. Paku Alam VIII as acting governor until Hamengkubuwono Xascended in 1998. Unlike the other heads of regions in Indonesia, the governor of the Special Region of Yogyakarta has the privilege or special status of not being bound to the period of position nor the requirements and way of appointment. However, in carrying out their duties, they have the same authority and responsibilities.