Chile's government is a representative democratic republic, in which the President of Chile serves as both head of state and head of government, within a formal multi-party system. Executive power is exercised by the president and their cabinet. Legislative power is vested in both the government and the two chambers of the National Congress. The judiciary operates independently of both the executive and legislative branches.

The Constitution of Chile was approved in a national plebiscite in September 1980, during the military dictatorship of Augusto Pinochet, and came into effect in March 1981. After Pinochet was voted out of office in 1988, the Constitution was amended the following year to simplify the process for future amendments.

In September 2006, President Ricardo Lagos signed into law several constitutional amendments passed by Congress. These reforms included eliminating the positions of appointed senators and senators for life, granting the President the authority to remove the commanders-in-chief of the armed forces, and reducing the presidential term from six to four years, while also prohibiting immediate re-election.

The Economist Intelligence Unit rated Chile a "flawed democracy" in 2023. According to the V-Dem Democracy indices, Chile was the third most electorally democratic country in Latin America in 2023.

Statistical analysis suggests that Chilean politicians in Congress are not randomly drawn from the population but over-represent high-income communities. As a result, Chileans of Castilian-Basque, Palestinian, and Jewish ancestry are disproportionately represented.

The autocratic and conservative republic (1831–1861) was replaced by the liberal republic (1861–1891), during which some political conquests were made, such as proportional representation (1871) and the abolition of the condition of ownership to have the right to vote (1885). During the period 1896–1924, Chile enjoyed continuous free and fair elections.

When the era of the parliamentary republic began in 1891, the struggle between liberals (pipiolos) and conservatives (pelucones) had already evolved due to the emergence of a multi-party system. In the 1880s, the Liberals split into two factions: the moderates, who did not want to impose secularism too quickly and were willing to compromise with the Conservatives, and the radical Liberals, who joined the Radical Party founded in 1863 or the new Democratic Party with more progressive, if not socialist, ideas.

European and particularly British companies having appropriated a large part of the country's economy (saltpeter, bank, railroad, trade), President José Balmaceda (1886–1891), leader of moderate liberals, decided to react by directing his policy in two directions: the nationalization of saltpeter mines and the intervention of the State in economic matters. Already facing the conservative aristocracy, he alienated the bankers. He was dismissed by a vote of Parliament and pressure from part of the army. He committed suicide by firearm at the end of the civil war that his supporters lost.