During X-XI centuries, when Novgorod was ruled by knyazes of Kiev, Novgorod was not different from all other Russian cities. Kievan knyazes sent a posadnik (deputy) to Novgorod (usually it was one of the knyaz' sons). After the death of Vladimir Monomakh, when knyazes began fighting for the title of the grand prince, the veche of Novgorod ceased to accept the rulers appointed from Kiev and began to elect the knyaz from a number of candidates belonging to various branches of the knyazes' family and offering them the title of knyaz of Novgorod on certain conditions. This autonomy became possible for the following reasons: first, the power of the knyazes of Kiev weakened and they were not strong enough to control distant Novgorod; and second, knyazes striving to become the grand princes, were afraid of losing a chance when being away in Novgorod. Soon, the people of Novgorod began to elect the archbishop for their home town. After the election, the new archbishop was sent to the metropolitan for the official approval. At last, they began to elect posadniks and tysyatskies. So, they surrounded the knyaz with the local bureaucracy to control him.
Novgorod became a fully autonomous state. It was ruled by veche, which elected and dismissed the knyazes, archbishops and local authorities. Veche adopted new laws, approved treaties with foreigners, declared and stopped wars. Veche judged the top officials and the most important cases: from conflicts of knyaz with the Novgorod authorities to the crimes of the citizens of prigorods. Veche assembled on the square known as the Yaroslavov dvor (Yaroslav's yard) near the marketplace on the Trade side of Novgorod, or on the square near Detinets, as the kremlin of Novgorod was known. Every free citizen of Novgorod who had his own house, could participate in veche (children and adults living in the parents' house, were not full-fledged citizens). Free citizens of prigorods also had the right to participate. The decisions were made not by the majority of votes, but by the loud shouting. This way of decision making seems strange today. To understand it better, we should remember that Novgorod consisted of some communities, "ends". Every end included smaller communities, "hundreds" and "streets". On veche, the members of every community grouped together and agreed their position. So, it was not necessary to count every vote. It was enough to make sure that all the communities agreed. When the decision was not unanimous, discussions and even fights began. Sometimes veche split into two. The enemies met on the bridge across Volkhov to fight and then the knyaz and the archbishop hurried there to pacify the opponents.
Obviously, these traditions made it impossible to discuss the details of complicated cases. Veche could only hear a report prepared in advance and approve or reject the proposed solution. These reports were prepared by the "government council", which included the highest city officials, posadniks and tysyatskies, both current and retired. The council was led first by the knyaz, later by the archbishop. The council was called in the Novgorod speech Gospoda. The Germans who traded with Novgorod, called it Herren. With time, Gospoda became more and more powerful.
When a new knyaz was elected, he signed a contract (ryad) with veche. Knyaz swore to rule in accordance with the old laws, and veche swore to accept his rule and to be honest. Knyaz was the highest power in Novgorod, both military and political. He commanded the army and was the supreme judge. Due to often conflicts, the citizens of Novgorod needed an unbiased intermediary, and knyaz ideal for this purpose. To limit the power of this ruler, a number of conditions were put. So, neither knyaz, nor his druzhina had no right to buy land or kholops on the territory of the duchy of Novgorod. They had no right to trade with foreign merchants without assistance of the Novgorod middlemen. So, knyaz had to remain a stranger. As soon as he was dismissed, he had to leave the territory of the duchy. Being a stranger, knyaz was obliged to live outside of the city, in the settlement called Gorodische, closer to the lake Ilmen. On the other hand, as soon as he abandoned the territory of the duchy, he lost the right to rule Novgorod. Knyaz had no right to change the laws of the duchy and had to rule under constant control of the posadnik, elected by veche. Members of his druzhina had no right to occupy the official posts in Novgorod. Knyaz received payments, called "gifts" and "tribute", the amount of which was predetermined. Also, he had the right to hunt in certain places. In his own turn, knyaz gave various privileges on the territory of his own duchy, from which arrived to Novgorod, to the citizens of Novgorod.
Posadnik and tysyatsky assisted and controlled the knyaz. Posadnik was the civilian ruler and tysyatsky was the leader of the militia (opolchenie). Posadnik managed the elected leaders (starostas, singular starosta) of the ends (konchanski starosta) and the streets (ulichanski starosta). Tysyatsky controlled sotskies. Every official, including posadnik and tysyatsky, not only managed, but also judged his subordinates. Posadnik was elected from the Novgorod aristocracy, boyars, and tysyatsky represented all people of Novgorod. Prigorods and pyatinas (fifths) were also governed by the elected officials. They were associated with one of the "ends" of the city, through which they corresponded with the authorities. As for the colonies of Novgorod, "lands" and "volost's", it is not easy to determine the degree of their dependence from the central city. Most probably, they were ruled by private entrepreneurs.
The archbishop, or vladyka, was the leader of the government council. He observed the rules of veche and approved its decisions. He confirmed the treaties with the foreigners. The foreign guests asked hime for assistance and protection. His palace was where Gospoda assembled and the city archive and the church treasury were stored (it was often used as the treasury of the state). He had his own staff, serfs and a military unit independent from the militia of Novgorod.