The party was founded in 1921 by Károly Rassay as the Independent Party of Smallholders, Workers and Citizens (Függetlenségi Kisgazda Földműves és Polgári Párt, FKFPP) as an attempt to mobilize voters for liberalism outside the cities. In the 1922 elections it ran alone, winning five seats,[1] and also in alliance with the National Democratic Party, with the joint list winning seven seats.[2]
Rassay reconstituted the party in 1930 as the National Liberal Party (Nemzeti Szabadelvű Párt),[3] as an attempt to build an alternative to the conservative government. In the 1931 elections it ran as the "Unified Liberal Democratic Party, winning four seats. The 1935 elections saw it run in alliance with the National Democratic Party again, this time under the name "Liberal and Democratic Opposition", with the alliance winning seven seats.
