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Lützelstein castle was built by Count Hugo, who was the son of Hugh, Count of Blieskastel. It was claimed by the Bishop of Strasbourg in 1223, but the count successfully defended it. After Count Friedrich died without a male successor, the county was subject to a protracted inheritance dispute between his uncle, Frederick Burkhard, and his sister, who was married to John of Leiningen. Both John and the sons of Burkhard died within a short time and without heirs, so the entire county was passed to the Electoral Palatinate in 1462.
George John I, Count Palatine of Veldenz attempted to develop his Alsatian territories as the focus of his state, which led to him building the city of Pfalzburg in 1570 and populating it with Protestant refugees from the Duchy of Lorraine. The project was so grand and unaffordable that in 1583 he was forced to sell the city and half the County of Lützelstein to Lorraine.