An attempted government raid on a popular independent television station in late 2001 led to mass public demonstrations and the subsequent replacement of several top officials in President Eduard Shevardnadze's government. Relations with Russia were strained over delays in Russian troop withdrawals from Georgia and charges that Chechen rebels were using Georgian territory as a base of operations. At year's end, a final settlement to the protracted conflicts in the separatist regions of Abkhazia and South Ossetia remained elusive.

Absorbed by Russia in the early nineteenth century, Georgia gained its independence in 1918. In 1922, it entered the U.S.S.R. as a component of the Transcaucasian Federated Soviet Republic, becoming a separate union republic in 1936. An attempt by the region of South Ossetia in 1990 to declare independence from Georgia and join Russia's North Ossetia sparked a war between rebels and Georgian forces. Although a ceasefire was signed in June 1992, the territory's final political status remains unresolved.

Following a national referendum in April 1991, Georgia declared its independence from the Soviet Union. Nationalist leader and former dissident Zviad Gamsakhurdia was elected president in May, but his authoritarian and erratic behavior resulted in his overthrow in January 1992 by opposition forces, led by Mkhedrioni paramilitary group leader Dzhaba Ioseliani and National Guard commander Tengiz Kitovani. In 1992, former Georgian Communist Party head and Soviet Foreign Minister Shevardnadze returned from Moscow to become president of Georgia. Parliamentary elections held the same year resulted in more than 30 parties and blocs gaining seats, although none secured a clear majority.

In 1993, Georgia experienced the violent secession of the long-simmering Abkhazia region and armed insurrection by Gamsakhurdia loyalists. Although Shevardnadze blamed Russia for arming and encouraging Abkhazian separatists, he legalized the presence of 19,000 Russian troops in Georgia in exchange for Russian support against Gamsakhurdia, who was defeated and reportedly committed suicide. In early 1994, Georgia and Abkhazia signed an agreement in Moscow that called for a ceasefire, the stationing of Commonwealth of Independent States troops under Russian command along the Abkhazian border, and the return of refugees under United Nations supervision. Parliamentary elections in November and December 1995 resulted in the Shevardnadze-founded Citizens' Union of Georgia (CUG) winning the most seats, while a concurrent presidential poll saw Shevardnadze secure victory with 77 percent of the vote.

The ruling CUG repeated its victory four years later in the October 1999 parliamentary election, capturing 132 seats. The opposition Revival Party led by Shevardnadze's archrival Aslan Abashidze, the leader of the autonomous republic of Ajaria, came in second with 58 seats. Election observers from the Organization for Security and Cooperation in Europe (OSCE) concluded that despite some irregularities, the vote was generally fair. In the April 2000 presidential poll, Shevardnadze easily won a second five-year term with a reported 81 percent of the vote. His closest challenger, former first secretary of the Communist Party Central Committee and leader of the parliament minority, Dzhumber Patiashvili, received only 17 percent of the vote. While Shevardnadze's win was widely anticipated, the large margin of his victory led to accusations of electoral fraud. Election monitors noted numerous and serious irregularities, including the stuffing of ballot boxes, the presence of police in polling stations, a lack of transparency in the vote tabulation process, inflated voter turnout figures, and a strong pro-Shevardnadze bias in the state media.

In late 2001, Georgia's government faced a deepening political crisis amid mass public protests. On September 17, Shevardnadze announced that he was resigning as CUG chairman, a move which many interpreted as a sign that the president was distancing himself from the growing "young reformers" movement within the ruling party. Just two days later, justice minister and member of the reformist group, Mikhail Saakashvili, resigned, citing the government's failure to battle corruption; he subsequently created a new political movement pushing for greater political reform. On October 30, tax police conducted a failed raid on the independent television station, Rustavi-2, which was well known for its reports on government corruption. The incident was broadcast live, prompting thousands of protestors to take to the streets with demands including the resignation of Shevardnadze and his cabinet. Although the president refused to step down, several members of his government eventually were replaced. The crisis also prompted the speaker of parliament, Zhurab Zhvania, one of the leaders of the "young reformers," to resign.

Georgia's tense relations with Russia continued to be strained over Moscow's accusations that Georgia was harboring Chechen rebels in the Pankisi Gorge region, a largely lawless area bordering Russia that is home to drug smugglers and criminal gangs responsible for numerous kidnappings, as well as to 7,000 Chechen refugees. Shevardnadze had repeatedly denied these accusations until September 2001, when for the first time he admitted that Chechen guerillas might be living in the Pankisi Gorge. In November, Russian military airplanes reportedly violated Georgian airspace and bombed a Georgian village in the area in an apparent attempt to flush out Chechen fighters; Georgian government officials termed the attack a "provocation." Subsequently, Russia reinforced its contingent of troops along its border with Georgia.

During a November 1999 OSCE meeting in Istanbul, Moscow agreed to close two of its four military bases in Georgia by mid-2001. While Russia completed its withdrawal from the Vaziani base near Tbilisi in late June 2001, Russian troops reportedly pulled out of the Gudauta base in the separatist region of Abkhazia in late October, about four months behind schedule. The fate of the other two bases in Batumi, one located in the autonomous region of Ajaria, and one in the predominantly ethnic Armenian area of Akhalkalaki, remained inconclusive at year's end.

Long-standing demands of greater local autonomy continued unresolved throughout the year. Nine years of peace talks between South Ossetia and Georgia have failed to find a solution to the territorial status of the region, which has maintained de facto independence from Tbilisi since 1992. In December 2001, Russian businessman and former Communist youth leader Edward Kokoev was elected president of South Ossetia, which he insisted should become part of the Russian Federation. In the southwestern region of Ajaria, Aslan Abashidze exercises almost complete control over the territory, which has retained considerable autonomy since 1991. A final agreement to the protracted conflict in Abkhazia remained elusive, as leaders in Tbilisi and Sukhumi, the capital of Abkhazia, continued to disagree on key issues, including the territory's final political status. In late 2001, ethnic Chechen and Georgian guerillas reportedly launched a series of armed incursions into the Kodori Gorge in Abkhazia. Separatist troops, whom Tbilisi maintains were assisted by Russian air support, eventually forced them to retreat.