Andorra is the last independent survivor of the March states, a number
of buffer states created by Charlemagne to keep the Muslim Moors from
advancing into Christian France. Tradition holds that Charlemagne
granted a charter to the Andorran people in return for their fighting
the Moors. In the 800s, Charlemagne's grandson, Charles the Bald, named
the Count of Urgel as overlord of Andorra. A descendant of the count
later gave the lands to the diocese of Urgel, headed by the Bishop of
Urgel.

In the 11th century, fearing military action by neighboring lords, the
bishop placed himself under the protection of the Lord of Caboet, a
Spanish nobleman. Later, the Count of Foix, a French noble, became heir
to Lord Caboet through marriage, and a dispute arose between the French
Count and the Spanish bishop over Andorra.

In 1278, the conflict was resolved by the signing of a pareage, which
provided that Andorra's sovereignty be shared between the Count of Foix
and the Bishop of Seo de Urgel of Spain. The pareage, a feudal
institution recognizing the principle of equality of rights shared by
two rulers, gave the small state its territory and political form.

Over the years, the title was passed between French and Spanish rule
until, under the French throne of Henry IV, an edict in 1607 established
the head of the French state and the Bishop of Urgel as co-princes of
Andorra.

In its mountain fastness, Andorra has existed outside the mainstream of
European history, with few ties to countries other than France and
Spain. In recent times, however, its thriving tourist industry along
with developments in transportation and communications have removed the
country from its isolation.

source: U.S. State Department Background Notes 1995