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Lucerne (Luzern) grew up around a Benedictine monastery, founded about 750 on the right bank of the Reuss by Murbach Abbey in Alsace, of which it long remained a "cell". It is first mentioned in a charter of 840 under the name of Luciaria, which is probably derived from the patron saint of the monastery, St Leodegar. The name Lucerrun is first mentioned in 1252. At some point, a small village grew up around the monastery. The first signs of a municipal constitution appear in 1252.
With the growing power of the Habsburgs in the area the ties that bound Lucerne to Murbach weakened. In 1291 the Habsburgs finally purchased Lucerne from Murbach. The purchase of Lucerne by the Habsburgs drove the three forest cantons (Uri, Schwyz and Unterwalden) to form an Eternal Alliance, an act that is considered to be the foundation of Switzerland. In 1332 Lucerne became the fourth member of the Eidgenossen or Swiss Confederation, and the first town to join the rural forest cantons.
The Battle of Sempach (1386) near Sempach drove the Habsburgs out of the region and strengthened the Confederation. That victory led also to the gradual acquisition of territory ruled by and from the town.
Amstalden, a wealthy innkeeper Schüpfheim in the Entlebuch valley of the canton of Lucerne, was the leader of a planned rebellion of the valley against the city of Lucerne. In a plot to limit the power of the city, officials from the neighbouring canton of Obwalden had promised their support. The conspiracy was detected before they could stage the planned coup. On 24 August 1478, Amstalden was arrested, tortured and interrogated, and finally beheaded in November 1478. The incident furthered the distrust amongst rural and urban cantons in the Old Swiss Confederacy and was one of the reasons for the conclusion of the Stanser Verkommnis (Treaty of Stans) in 1481, an important coalition treaty of the cantons of the Old Swiss Confederacy
During the Reformation Lucerne remained attached to Roman Catholicism, of which ever since it has been the great stronghold in Switzerland. The papal nuncio resided here from 1601 to 1873. In the 16th century, during the early modern age, the town government fell into the hands of an aristocratic oligarchy, whose power, though shaken by the Swiss peasant war of 1653 in the Entlebuch, lasted until 1798. Under the French-supported Helvetic republic (1798–1803) Lucerne was the seat of the central government. When the republic collapsed, under the Act of Mediation (1803) it was one of the six "Directorial" cantons and during the Restoration (from 1815 to 1848) it was one of the three ruling cantons.