Crash Course to Star Wars Prequel Politics

So in speaking to some people about why they hate the prequels, I have learned that alot of people don't understand the politics going on so they feel like the story is hard to follow.  There are alot of things going on, but I truly believe that understanding Star Wars politics makes the world seem more real and allows me to get swept up in it so I am here to give you a crash course in the politics of the Star Wars prequels.

Organizations to Know:

1.) Trade Federation: Republic commerce guild and trade cartel that grew more and more powerful over time till it controlled nearly every trade route in the galaxy.   They began forming their own military (a droid army) to maintain control over major trade routes and they soon began using their monopoly to control the economies or several systems dependent on trade for economic survival.
2.) Galactic Republic:  a representative democracy, composed of various star systems, sectors, and member worlds throughout most of the known galaxy.  It is composed of 3 branches:  legislative, executive, and judicial.
3.) Galactic Senate: the legislative branch of the Galactic Republic.  It is a body of elected or appointed representatives.  It's main duties include mediating disputes over issues ranging from planetary to galactic-scale, regulating trade routes between star systems, and in theory, represented the interests of Republic Citizens.
4.) The Office of the Supreme Chancellor:  the executive branch of the Galactic Republic comprised of the Supreme Chancellor who is elected by the members of the Senate to be the highest representative of the Republic.
5.)  Supreme Court and Lower Regional Courts: the judicial branch of the Galactic Republic.
6.)  Intergalactic Banking Clan:  another commerce guild similar to the Trade Federation but instead of controlling trade routes, they controlled the flow of credits between nearly every banking family in the galaxy.  They are the ones that the Republic borrows money from when they need things like ships or clones for the war.
7.)  Jedi High Council:  elected members of the Jedi Order to lead the Order and act as an advisory committee directly for the Office of the Supreme Chancellor

Position and Titles to Know:

1.)  Viceroy = leader of the Trade Federation
2.)  Senator = a representative in the Galactic Senate from a planet that is member of the Galactic Republic
3.)  Chancellor = leader of the Galactic Senate who has been elected by the other member of the senate.  This person is responsible for mediating conflicts and having final say when the senate can not come to consensus.
4.)  King or Queen = person in charge of their planets local government decisions.

Now...What happened???

Phase 1:   The Blockade on Naboo

Without going too far back into some stuff that is not even considered canon anymore, I am going to start this story with the blockade on Naboo.  If you would like even earlier background to this story, I suggest reading James Luceno's book "Darth Plagueis,"

Naboo, along with several other planets, is a part of the free trade zone meaning there are no taxes on the goods passing through trade routes in this area.  Episode 1 starts by saying that the Senate is currently voting on passing new taxation laws for the planets in this free trade zone.  Seeing as how this would cut into their profits, the Trade Federation decides to make a statement by creating a blockade on Naboo, restricting all goods coming in and going out and causing serious economic strains on Naboo.

 Palpatine is currently serving as a Senator from Naboo and secretly a Sith Lord.  He contacts Viceroy Gunray, the leader of the Trade Federation, as Darth Sidious and convinces him that he will provide him with large amounts of plasma (a highly profitable substance that is found on Naboo) if he doesn't stop with the blockade, but also launches an attack on Naboo.

His plan is that by the time the slow working Senate grants aid to the people of Naboo against the Trade Federation, the damage will be done and Naboo will be under the control of the Trade Federation.  Palpatine can then use his alter ego Sidious to give the Trade Federation the plasma under the table and the Trade Federation will release control of Naboo and saving his home planet from Federation control till catapult his political influence in the senate.

Phase 2:  Palpatine's Rise to Supreme Chancellor

Queen Amidala of the Naboo of course goes to Coruscant to appear before the Senate and ask them for their support.  The Trade Federation of course denies any invasion and says that they demand proof.  Chancellor Valorum asks Queen Amidala to wait for a committee to investigate her claims before granting her the support.  She denies his request and is egged on by Senator Palpatine to enact a vote of no confidence in Chancellor Valorum.  Palpatine gathers supporters and the vote passes and Chancellor Valorum is fired.  Palpatine again gathers his political supporters and they begin campaigning for him to be elected the new Supreme Chancellor.

Meanwhile, Queen Amidala is sick of waiting on the Senate's help and forms and alliance with the Gugans and together with the help of a few Jedi Knights, they defeat the Trade Federation troops and free Naboo from Federation control.  Riding on his popularity from his home world's triumph over the Trade Federation, Palpatine is elected Supreme Chancellor.

Phase 3:  Starting a War

In order for Palpatine to keep his position as Chancellor even after his term is over, he must create a crisis situation that the senate does not trust anyone else to handle but their beloved Chancellor.  So Darth Sidious sends his apprentice, Count Dooku, to start a separatist movement (Confederacy of Independent Systems).  This separatist movement consisted of  various planetary and sectorial governments, as well as some mega-corporations, that declared intention to leave the Galactic Republic, refusing to comply with it's excessive taxation and corruption in the Senate.  (Sound familiar?)

The Separatists needed the help of the Trade Federation so that they could utilize their droid army.  Viceroy Gunray, still angry about his defeat on Naboo, agrees to join if Dooku has Queen (now Senator) Amidala killed.  After a failed assassination attempt, Padme is forced to seek refuge on her home planet of Naboo and she gives her Senate duties to, you guessed it, Jar Jar Binks.

Obi-Wan discovers the Separatists plans are not just to leave the Republic, but to overthrow it.  And they have the money and help of the Trade Federation and their droid army.  In the face of the growing Separatist threat, the Senate is stuck in a debate on whether or not to borrow more money from the Banking Clan in order to get more clones to defend the Republic.  Queen Amidala is very against borrowing more money from the Banking Clan (placing the Republic even more at their mercy) but she is not there to express her opinions.  So Jar Jar moves to end the discussion and give emergency powers over to Chancellor Palpatine who immediately orders more clones.  And the Clone Wars begin.

Phase 4:  Bringing Peace to the Empire

Palaptine and his Master were the ones that placed the orders for the clones long before any of this ever happened.  This whole thing was a very long awaited plan.  The Separatists were also working on plans for an all powerful space station, but that's a story for another time.  :)  Once again, if you want more background about how the clone army was ordered or how Dooku got involved with Sidious, I recommend the Darth Plagueis book.

The main thing you need to know is that Sidious was controlling both sides of the war.  He had control of the clones because he ordered their programming, and his apprentice Dooku was acting on his orders when he created the Separatist army.  When Anakin became Darth Vader, Sidious sent out Order 66 to all of the clone troopers and they all turned on their jedi friends and killed them.  In the wake of this devastation, a new Empire was formed with Emperor Palpatine at it's head.