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Before 1975 local government in Scotland was organised on the county system. In reforms that took effect from 1975, the Conservative government of Edward Heath introduced a system of two-tier local government in Scotland, divided between large Regional Councils and smaller District Councils. The only exceptions to this were the three Island Councils, Western Isles, Shetland and Orkney which had the combined powers of Regions and Districts. In 1995 the Conservative government of John Major decided to abolish this system and merge their powers into new Unitary Authorities, roughly equivalent to the old counties.

HM Queen Elizabeth II, head of state of the United Kingdom, is descended from King James VI of Scotland, the first Scottish monarch to also be King of England (James I of England from 1603). While some controversy has simmered amongst the Scottish public over her official title since her coronation (many believe that, being the first Queen Elizabeth of Scotland, she should use the style "Elizabeth I"), the courts of Scotland have confirmed "Elizabeth II" as her official title. She has said that in the future monarchs will follow the international ordinal tradition that, where a monarch reigns in a number of non-independent territories (or independent territories that agree to share a monarch) that each have a differing number of previous monarchs of the same name, the highest ordinal used in any of the territories is the one used across all.

Scotland's location on the north-western periphery of Europe did not mean the country had a small part in the Second World War. October 1939 saw naval bases in Scotland taking the first German attacks on Britain, both submarine and bomber attacks on Scapa Flow and raids on Rosyth which met with RAF fighters getting their first successes over Britain downing bombers into the Firth of Forth and onto East Lothian. The shipyards and heavy engineering factories in Glasgow and Clydeside played a key role in the war effort, and soon became targets for the Luftwaffe. The town of Clydebank in particular suffered great destruction and loss of life during the blitz. The Highlands again provided a disproportionate number of troops for the war effort. Many thousands of Commandos and resistance fighters received training in the harsh conditions of the Lochaber mountains.

Tied as it was to the health of the British Empire, Scotland suffered after the First World War as it had gained beforehand. In the Highlands, which, for cultural reasons, had provided a disproportionate number of recruits for the British army, a whole generation of young men were lost, and many villages and communities suffered greatly. In the Lowlands, particularly Glasgow, the terrible working and living conditions for the industrial workers, many of whom did not agree with the motives of the war, led to industrial and political unrest. John MacLean became a key political figure in Red Clydeside and on Bloody Friday January 31st 1919, the British Government was so fearful of a revolutionary uprising in Glasgow that tanks and soldiers were stationed in George Square.

After World War II Scotland's economic situation became progressively worse until the 1970s, and only began to turn around after the discovery and development of North Sea oil and gas. During this period the Scottish National Party refocused their arguments for Scottish independence around their "It's Scotland's Oil" campaign.

The significance of coal, once Scotland's most important mineral resource, has declined. Oil, however, gained prominence in Scotland's economy during the 1970s, with the growth of North Sea oil extraction companies. Natural gas is also abundant in the North Sea fields. Aberdeen is the centre of the oil industry. Other important industries are textile production (woollens, worsteds, silks, and linens), distilling, and fishing. Textiles, beer, and whisky, which are among Scotland's chief exports, are produced in many towns. Salmon are taken from the Tay and the Dee, and numerous coastal towns and villages are supported by fishing from the North Sea. Only about one quarter of the land is under cultivation (principally in cereals and vegetables), but sheep raising is important in the mountainous regions.

The Scottish National Party (SNP) was formed in the 1930s with the aim of achieving Scottish independence. They are broadly on the left-of-centre and are in the European Social-Democratic mould. They are currently the second most popular party electorally, although their highpoint appears to have been in the 1970s.