During the 19th century, Britain's population increased at a dramatic rate, accompanied by rapid urbanisation, which caused significant social and economic stresses. To seek new markets and sources of raw materials, the British government under Benjamin Disraeli initiated a period of imperial expansion in Egypt, South Africa, and elsewhere. Canada, Australia, and New Zealand became self-governing dominions.
By the start of the 20th century, Germany and the United States had begun to challenge Britain's economic lead. Subsequent military and economic tensions between Britain and Germany were major causes of the First World War, during which Britain relied heavily upon its empire. The conflict placed enormous strain on the military, financial and manpower resources of Britain. Although the British Empire achieved its largest territorial extent immediately after World War I, Britain was no longer the world's pre-eminent industrial or military power. In the Second World War, Britain's colonies in East and Southeast Asia were occupied by Japan. Despite the final victory of Britain and its allies, the damage to British prestige helped to accelerate the decline of the empire. India, Britain's most valuable and populous possession, achieved independence as part of a larger decolonisation movement in which Britain granted independence to most territories of the empire. The transfer of Hong Kong to China in 1997 marked for many the end of the British Empire. Fourteen overseas territories remain under British sovereignty.
No further attempts to establish English colonies in the Americas were made until well into the reign of Queen Elizabeth I, during the last decades of the 16th century. In the meantime, the 1533 Statute in Restraint of Appeals had declared "that this realm of England is an Empire". The subsequent Protestant Reformation turned England and Catholic Spain into implacable enemies. In 1562, the English Crown encouraged the privateersJohn Hawkins and Francis Drake to engage in slave-raiding attacks against Spanish and Portuguese ships off the coast of West Africa with the aim of breaking into the Atlantic slave trade. This effort was rebuffed and later, as the Anglo-Spanish Wars intensified, Elizabeth I gave her blessing to further privateering raids against Spanish ports in the Americas and shipping that was returning across the Atlantic, laden with treasure from the New World. At the same time, influential writers such as Richard Hakluyt and John Dee (who was the first to use the term "British Empire") were beginning to press for the establishment of England's own empire. By this time, Spain had become the dominant power in the Americas and was exploring the Pacific Ocean, Portugal had established trading posts and forts from the coasts of Africa and Brazil to China, and France had begun to settle the Saint Lawrence River area, later to become New France.
Although England trailed behind other European powers in establishing overseas colonies, it had been engaged during the 16th century in the settlement of Ireland with Protestants from England and Scotland, drawing on precedents dating back to the Norman invasion of Ireland in 1169. Several people who helped establish the Plantations of Ireland also played a part in the early colonisation of North America, particularly a group known as the West Country men.