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The earliest traces of human settlement date to the Neolithic with sites found near Stansstad that are from 4000–3100 BC. The same sites, near Stansstad, also contain Late Bronze Age (1400–1100 BC) artifacts, with additional Bronze Age sites near Hergiswil and Ennetmoos. A La Tène (500–100 BC) grave for a 10-year-old girl has been found in Stans. Based on these finds, it appears that the Nidwalden region has been settled since the 1st millennium BC.
During the Roman Empire Ob and Nidwalden were inhabited by a Gallo-Roman or Celtic population. While there are few artifacts from the population, many names of the towns, rivers and mountains have either Celtic or Gallo-Roman roots. By the 8th century the Alemanni entered the valleys of present-day Nidwalden and intermingled. At this time a Roman Catholic church was built in Stans, most likely founded by an Alemanni noble family. The church in Stans would remain until the 10th century when it was replaced by a church in Buochs.
Initially the land was owned by a number of noble families and abbeys. But by the late 13th century the major powers in Nidwalden had shrunk to three: the Habsburgs, Murbach Abbey and Engelberg Abbey. In 1291 Rudolph of Habsburg bought Obwalden from Murbach Abbey. In response the people of Nidwalden (Obwalden joined shortly before the document was signed, the two halves forming Unterwalden) joined Uri and Schwyz to form an alliance which is considered the foundation of the Old Swiss Confederacy.
At the time there was no state, but towards the end of the 14th century early forms of government were established. This included institutionalized assemblies and courts. In the 14th and 15th century the people of Nidwalden joined the people of Obwalden to discuss important matters, but the two cantons were never really one. For example, Obwalden did not participate in the annexation of Bellinzona, Riviera and Blenio areas (today located in the canton of Ticino).
Under the Helvetic Republic imposed in 1798 by French Revolutionary troops, Switzerland became a united country. The ideas of the French Revolution were not popular in some parts of the Swiss nation including Nidwalden. The cantons were accustomed to self-government and many resented the limits on the freedom of worship in particular. When rebel forces threatened the Republic, Nidwalden was attacked by French troops on 9 September 1798. The canton's infrastructure was badly damaged and at least 400 people were killed.
After the end of Napoleonic rule in 1814, most of the changes were reverted. Only in 1877 did Nidwalden introduce a new constitution. The open assembly (Landsgemeinde) was abolished in 1997.