Even before after the Anglo-Boer War, relations between Black and White were very strained. By the turn of the twentieth century Mandela was not yet born, but the racial discrimination which he fought against nearly all his life was already deeply entrenched in South Africa. The pro-white policies of the British colonial administrator Alfred Milner followed by the discriminatory legislation enacted by the Union of South Africa engendered considerable resistance from Blacks and led to the formation and growth of new political bodies.

In 1902 Coloureds in Cape Town formed the African Political Organisation to represent the interests of "educated ... Coloured people." Abdullah Abdurahman, who became president of the organisation in 1904, stressed his organisation's displeasure at the political discrimination to which Coloureds were subjected. By 1910, he had managed to build an organisation of 20 000 members. Another political activist, Mohandas Gandhi, began a passive resistance campaign against the pass laws in 1906, leading Indians in Natal and the Transvaal (they were legally prohibited from living in or entering the Orange Free State) in demonstrations and organising stop-work protests that won thousands of supporters.

Discrimination policies assumed new urgency with the formation of the South African Native Affairs Commission in 1903. That year witnessed the introduction of the pass system that would later be the focus of much resistance by Mohandas Gandhi, among other people. The pass system effectively meant that Africans could not be employed by any farmer, miner or industrialist without a pass. 

The following year, indentured Chinese labourers (who were repatriated to their country in 1907) were imported to work on the gold and diamond mines, with the consequence that Black workers' wages were further eroded. Poor wages together with inhumane working and living conditions were among the major causes of worker disgruntlement at the time. The situation was exacerbated by the introduction of a poll tax (a flat-rate tax levied on all members of the population and often a requirement for voting eligibility) in 1906. Failure to pay taxes, which included taxes on salt and homes (the hut tax) compelled the Black population to seek work in White-owned businesses.

In the same year there were attempts to reconcile English and Boer populations. This culminated in the Bambatha uprising in which 3 000 Black and 30 White men were killed at Nkandla in Natal. In the aftermath of these massacres, numerous meetings organized by Africans, Coloureds and Indians protested the Whites-only exclusivity of the constitutional discussions that took place between 1908 and 1909. These activities culminated in the establishment of the South African Native Convention or National Convention in March 1909, which called for a constitution giving "full and equal rights" for all Blacks, Coloureds, and Indians. However, it entrenched White supremacy under a unitary state. Subsequently, an African delegation traveled to London to protest this, but was ignored.

Instead of addressing the constitutional crisis, in the following year the South African Act was passed in Britain granting domain to the White minority over Native (African), Asiatic (mostly Indian) and "Coloured and other mixed races". The British dream of a union between Britain's Cape and Natal colonies and the defeated boer republics was realised on 31 May 1910 when the Union of South Africa was established in terms of the South Africa Act of 1909.

General Louis Botha, the first Prime Minister of the Union, introduced the policy of formal racial segregation, leading to the further erosion and the Black majority's political rights and the aggravation of the plight of African communities. Under the new system of government, for example, , white magistrates were given increased control of local African communities. Mandela would later describe this reform as the capture of the institution of chieftaincy "to suppress the aspirations of their own tribesmen." From the outset, the White Union government implemented a policy of Apartheid (the separate development of the races) and  it became highly unpopular as successive laws further curtailed the rights of the Black majority.

The Mines and Works Act of 1911 was an importat factor leading to the formation of the South African Native National Congress in 1912, renamed the African National Congress in 1923. The Act legislated that Black workers could only be engaged as cheap semi-skilled labourers and effectively prohibited Black workers from seeking skilled work. For these so-called "unskilled" workers, the political environment created by racist rule ensured that they worked under appalling conditions. Their plight was exacrbated in 1914 by the formation of the Afrikaner National Party (NP) under General Hertzog. The NP dedicated itself to racial separation, hierarchical stratification and republicanism (the belief that the supreme power of a country should be vested in an electorate). Eligibility to vote was seen as a right belonging to Whites who granted it at their discretion as a privilege to non-whites. Suffice to say, electoral privileges were not extended to Blacks. Initially, the ANC provided feeble opposition to the White government, but became a more powerful force in later decades.

Land dispossession lies at the heart of South Africa's history and heritage of inequity and the new ANC was created against the backdrop of massive deprivation of Africans' right to own land. 

Since 1652, successive colonial administration had systematically deprived Black communities of their land.  The loss of this crucial resource was arguably the most important factor leading to the impoverishment and marginalization of African communities. It was also arguably the most important factor spurring on formative forms of organized resistance. As will be demonstrated later, it was opposition to the Natives Land Act, preliminary drafts of which were debated in 1911, that led to the formation of the ANC. Several hundred members of South Africa's educated African elite met at Bloemfontein on January 8 1912 to establish a national organisation to protest against racial discrimination and to appeal for equal treatment before the law. The founding president was John L. Dube. A minister and schoolteacher who had studied in the United States, Dube was strongly influenced by the American educator and activist Booker T. Washington. Pixley Ka Isaka Seme, a lawyer and a prime mover in organising the meeting to establish the congress, was appointed treasurer. Solomon T. Plaatje, a court translator, author, and newspaper editor who had worked in Kimberley and Johannesburg, became secretary general. The meeting to establish the ANC opened and closed with the singing of the hymn "Nkosi sikelel'i Afrika" ("God Bless Africa"), which had been composed at the end of the nineteenth century by a Xhosa poet. Today, it is half independent South Africa's national anthem. (The other half is The Stem, the national anthem of the apartheid government.)

Overall, the congress was moderate in composition, tone, and practice. Its founders, all men, felt that British rule had brought considerable benefits, especially Christianity, education, and the rule of law, but who also considered that their careers as teachers, lawyers, and court translators were hindered by the racial discrimination so deeply entrenched in South Africa. They called not for an end to British rule, but rather for respect for the concept of equality for all, irrespective of colour. They respected traditional authorities in African societies and made chiefs and kings office-holders within the congress. They believed that they could best achieve their aims by dialogue with the British. As John Dube said, the congress pursued a policy of "hopeful reliance on the sense of common justice and love of freedom so innate in the British character." Such reliance, however, was proven unfounded by the adoption of the Natives Land Act in 1913.

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