Novgorod's independent or, more accurately, autonomous polity emerged as a result of disintegration of the more or less united Rus’ (Kievan Rus’ in the historiographic tradition) in the second half of the eleventh century to the first decades of the twelfth century. It is often assumed that the ‘Novgorod republic’ was born in 1136 when after acute domestic conflicts Prince Vsevolod Mstislavich was expelled by Novgorodians. However, the actual development of ‘republican’ political institutions in Novgorod was a more complex process, which had started much earlier and would be completed much later. In its heyday, Novgorod ruled over a vast territory stretching from the headwaters of the Volga in the south to the White and Barents Seas in the north, from the shores of Lake Peipus in the west to the banks of the Northern Dvina River in the east.

Gradually Novgorod became a mighty trading power on the Baltic Rim thanks to the foreign permanent centers of trade, which were founded in Novgorod. The first of them was the Gothic court built by Scandinavian tradesmen from the island of Gotland in the Baltic Sea at the turn of the twelfth century. In the fourteenth and fifteenth centuries it was rented by the Hansa and it was German merchants who owned it. In the end of the twelfth or in the early thirteenth century an originally German St. Peter Court was founded. Along with Bruges, London, and Bergen, Novgorod was one of the most important trade partners of the Hansa, an exporter of such goods as furs and wax which were in high demand on the West European market.

Sources covering the period of Novgorod's independence (1136-1478) tend to emphasize the idea of the fraternal unity between the members of polity. In a way, this ‘brotherly communalism’ resembled (but of course was not completely identical with) the bonds within the more typically West European guild culture (see also below). Of course, those Novgorodians did not need to be actually genetic ‘brothers’ to each other. Indeed, some of them could have been brothers or other members of the same family, of the same blood kin, since medieval Novgorod was de facto ruled by the local aristocratic elite, the boyars.