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During the three centuries following its origin in 1042, it was a commercial center controlled and exploited by various competing feudal lords. In the 13th century, Isny's merchants built a fortification system to protect the town from marauders and rival feudal rulers. The town is still partially surrounded by the city walls and moat that were built during these early turbulent times.
After three centuries of domination by feudal lords and territorial rulers, Isny's middle class was able to purchase the town's independence in 1365. Isny's status as an Imperial city made it a self-governing republic in which the city government was elected by propertied residents and in which the guild system thrived. In 1529, Isny's Protestant minority took the city council and voted to make the town Protestant and the Nikolaikirche became the town's main Protestant church. In 1803, the Kingdom of Württemberg allowed the Catholic majority to once again move to the city. In 1889, the majority of urban residents was Catholic (1139 ev / 1444 Cath.).
Isny enjoyed a vibrant economy, based primarily on linen production, until competition from abroad, the devastation of the Thirty Years' War, and a series of fires and plagues brought production to a halt in the 17th century. The town experienced a revival after the end of World War II, when a rehabilitation center for war veterans was established there. Fortunately, Isny emerged from the war largely undamaged, and has since become a popular destination for vacationers and resort-goers.