The Act, introduced by the Government of David Lloyd George, provided for two partitioned Irish home rule states, Northern Ireland and Southern Ireland. Their creation was a compromise produced by the British Government when faced with the demand by Irish nationalists for home rule and the demand of Irish unionists that home rule not be conceded. Each state was to have a two-chamber parliament, a House of Commons and a Senate. Elections in both states for both lower houses took place in May 1921.
Both states were to be linked by the Lord Lieutenant of Ireland, representing the King, and a Council of Ireland, an embryonic all-Ireland parliament.
The Northern Ireland state came into being in 1921. At its opening, held in Belfast City Hall, King George V made a famous appeal for Anglo-Irish and north-south reconciliation. The speech, drafted by the government of David Lloyd George on recommendations from Jan Smuts, Prime Minister of the Union of South Africa, with the enthusiastic backing of the King, opened the door for formal contact between the British Government and the Republican administration of Eamon de Valera.
The Southern Ireland state never became a reality. Of the 128 MPs elected to the House of Commons of Southern Ireland, all were returned unopposed. The 124 Sinn Féin MPs, calling themselves TDs (gaelic for Member of Parliament) assembled as the Second Dáil of the Irish Republic
With only 4 MPs (all Unionists representing graduates of the Irish Universities) and 15 appointed senators turning up for the state opening of parliament in the Royal College of Science in Dublin (now Government Buildings) in June 1921, the parliament was suspended.
The House of Commons of Southern Ireland came back into existence again for a short time under the Anglo-Irish Treaty of 1921, to fulfill two functions. The first was to formally ratify the Treaty, which it did in January 1922 (The Second Dáil, which had authority in nationalist eyes for ratifying the Treaty, did so in December 1921). Secondly, it was required to put in place a Provisional Government, which it did, under General Michael Collins. Collins was then legally installed in office by the Lord Lieutenant, Lord Fitzalan.
The Treaty provided for the ability of Northern Ireland's Parliament, by formal address, to opt out of the new Irish Free State, which it duly did. A Boundary Commission was set up to redraw the border between the new Irish Free State and Northern Ireland. The Council of Ireland never functioned as hoped, as an embryonic all-Ireland parliament.
In 1927, the Vice-President of the Executive Council, Kevin O'Higgins drew up plans to join Northern Ireland and the Irish Free State as an Irish dual monarchy under King George V, who was to be crowned King of Ireland at a public ceremony in the Phoenix Park in the centre of Dublin. However, with O'Higgins' assassination later that year, the plan was dropped.