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The election of the Labour government in 1997 ensured that there would be a referendum on establishing a devolved Scottish Parliament. This was held in September, 1997 and the Scottish people voted 75% in favour of its establishment.

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.

Scotland has distinct media from the rest of the UK. For example, it produces many national newspapers such as The Daily Record (Scotland's leading tabloid), The Herald broadsheet, based in Glasgow, and The Scotsman in Edinburgh. The Herald, formerly known as the Glasgow Herald, changed its name to promote a national rather than a regional identity, while The Scotsman, which used to be a broadsheet, recently switched to tabloid format. Sunday newspapers include the tabloid Sunday Mail (published by Daily Record parent company Trinity Mirror) and the Sunday Post, while the Sunday Herald and Scotland on Sunday have associations with The Herald and The Scotsman respectively. Regional dailies include The Courier and Advertiser in Dundee in the east, and The Press and Journal serving Aberdeen and the north.

The modern system of branch banking (in which banks maintain a nationwide system of offices rather than one or two central offices) originated in Scotland. Only strong political pressure during the 19th century prevented the resultant strong banking system from taking over banking in England. However, although Scottish banks proved unwelcome in England at the time, their business model became widely copied, firstly in England and later in the rest of the world.

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.

Most Scottish industry and commerce is concentrated in a few large cities on the waterways of the central lowlands. Edinburgh, on the Firth of Forth, is a cultural centre, the capital of Scotland, and one of the the top financial centres in Europe. Glasgow, one of the largest cities in the UK, lies on the Clyde; it is Scotland's leading seaport and was once a centre of shipbuilding and it supports numerous light industries. Although heavy industry has declined, the high-technology Silicon Glen corridor has developed between Glasgow and Edinburgh. Tourism is also very important.

The Church of Scotland (often referred to as The Kirk) functions as the national church. It differs from the Church of England in that it has a Presbyterian form of church governance, not subject to state control. This goes back to the Scottish experience of reformation, initiated in 1560 by John Knox. The Scottish Reformation in essence took place at a grassroots level, and the Scots chose Presbyterianism as their method of church government. This differs from the situation in England, where Henry the Eighth personally unleashed the English Reformation and chose the Episcopal system that survives to this day in the Church of England.

Historically the politics of Scotland have reflected those of the UK as a whole, although with some differences. For example, besides the main UK-wide political parties (Labour, Conservatives and the Liberal Democrats) a number of Scottish-specific parties operate. These include the Scottish National Party (SNP), the Scottish Socialist Party (SSP) and the Scottish Green Party. These parties became more of a force in Scottish politics after the establishment of the Scottish Parliament in 1998.

Scotland retains its own distinct sense of nationhood. Academic research consistently shows that people in Scotland feel Scottish, whilst not necessarily feeling the need to see that translated into the establishment of a fully-independent Scottish nation-state.

The feudal system lingered on in Scots law on land ownership, so that a landowner still had obligations to a feudal superior including payment of feu duty. In 1974 legislation began a process of redeeming feuduties so that most of these payments were ended, but it was only with the attention of the Scottish Parliament that a series of acts (http://www.ejcl.org/83/art83-5.html) were passed, the first in 2000, for The Abolition of Feudal Tenure on November 28, 2004.

Banking in Scotland also features unique characteristics. Although the Bank of England remains the central bank for the UK Government, three Scottish corporate banks still issue their own banknotes: (the Bank of Scotland, the Royal Bank of Scotland and the Clydesdale Bank). These notes have no status as legal tender in England, Wales or Northern Ireland (although they can be used throughout the UK, particularly in Northern Ireland, where Irish banks also issue their own banknotes, and they are also freely accepted in the Channel Islands). In Scotland, neither they nor the Bank of England's notes rank as legal tender (as Scots law lacks the concept), however banknotes issued by any of the four banks meet with common acceptance

The largest political party operating in Scotland is the Labour Party. They replaced the Liberals as Scotland's main political force in the early twentieth century and traditionally represent the interests of workers and trade-unionists. They currently operate as the senior partners in a coalition Scottish Executive.