On September 25, 1555, the Diet of the Holy Roman Empire at Augsburg agreed the Peace of Augsburg, and the religious wars of the first half of the sixteenth century in Germany came to a stop. The formula was cuius regio, eius religio: whose rule, his religion. Each prince of the empire was to decide whether his territory was Catholic or Lutheran, and those who disagreed could leave.
It was about power. Charles V had spent thirty years fighting the Protestant princes, the French and the Ottomans, and had won at Muhlberg in 1547 and then lost everything he had won within five years, when Maurice of Saxony turned on him and drove him over the Alps. He had also spent the 1540s trying to arrange a theological compromise at the Council of Trent, which had satisfied nobody, and the Interim of 1548, which had been imposed and had failed.
It recognised reality. The Confession of Augsburg of 1530 was the defining Lutheran document, and the peace granted toleration to those who adhered to it, which meant Lutherans and not anyone else. Calvinists, Zwinglians and Anabaptists were excluded and remained illegal. Ecclesiastical princes who converted were to lose their sees under the reserved right of the church, a clause the Protestants never accepted and which was suspended in practice.
The arrangement was fragile. It lasted 63 years. It gave no protection to a minority within a territory, it settled nothing about church property that had already been secularised, and it excluded the fastest-growing confession in Europe. The Peace of Westphalia in 1648 extended toleration to the Calvinists, fixed the property question at 1624, and made the individual's right to worship privately a matter of treaty.
What it established was more important than what it settled. The Peace of Augsburg is the first European treaty to treat religion as a matter of territorial jurisdiction rather than of universal obligation, and it made the prince rather than the emperor or the pope the effective authority in Germany. That is the origin of the state system in the empire, and it is why Germany was religiously fragmented.
Charles V signed it and then gave up. He abdicated his other crowns in 1555 and 1556, divided his empire between his brother Ferdinand and his son Philip, and retired to a monastery in Extremadura, where he died in 1558. Ferdinand, who had negotiated the peace, became emperor.