Racism was a problem that plagued Equestria ever since the human takeover. The humans who moved to Equestria naturally believed themselves to be superior because they destroyed the Equestrian Military in the war of 1968. The Equestrians, however, believed that they were superior because they could fly and do magic. All of this led to much distrust and occasionally, small skirmishes between human and Equestrian superiority groups. When the small-scale revolts started to happen around late 1989, everything got worse with constant street battles and bombings. With the collapse of the USSR and Equestria declaring independence*, the situation got even more dire. The new government had to deal with not just street battles and bombings, but now gerrymandering and political lobbying as each side wanted to exploit the democratic government to gain an advantage over the other. (*as a side note, Equestria joined the CIS placing them firmly in the Russian's camp)
By 1992, the government was dealing with a full-scale civil war when the neo-nazi Ponies For a Pure Equestria (PPE) elected a president and a majority in the Duma. The humans (who mostly lived in Stalliongrad) declared a new Equestrian state called the Federal Republic of the State of Equestria (FRSE) and promptly attempted to storm Красноярск (which was renamed, previously being Canterlot). The Russians backed the FRSE and NATO backed the PPE (due to the Russians backing the FRSE). The war continued for at least a year before the Russians started to commit troops disguised as "militiamen". The Russians tipped the balance in the FRSE's favor with the additional boost of manpower and equipment. The FRSE eventually won in 1999 with the PPE not being able to support the frontline when Spetsnaz assassinated the new "princess" and the top generals along with destroying the renovated royal palace (which was formerly the building the Duma resided in).
At the turn of century*, Equestria was in a dire state with most of the country destroyed by the civil war. The Equestrian KGB roamed the streets of every town looking for dissent and making sure no pony or person questioned the government. However, Equestria slowly rebuilt with the help of a main six recently released from a FRSE (formerly Soviet) gulag. (*sidenote, Equestrian nuclear weapons were handed back to Russia due to a lack of launch codes and a promise of no territorial claims. Like Ukraine and the only post-soviet powers that had Soviet nuclear weapons)
In 2001, an insurgent group called "The Equestrian Free Army" (EQFA) began. It started out as a small group of ponies unhappy with the dictatorship and harsh treatment of non-humans. The group quickly started to gain members. The group started to bomb KGB field offices and government buildings. The KGB began cracking down by executing anyone suspected of collaboration. NATO then began to fund and supply the EQFA, who took over Appleloosa and declared it "liberated". It was swiftly recaptured.
By 2002 the EQFA was declared a terrorist group by every country in the CIS. The FRSE declared martial law and sent in a newly formed militia. The militia (comprised completely of humans) began to conduct mass executions, which only led to the EQFA growing in strength and an influx of new members. As the FRSE began to get more desperate, Russia began to demand territory, including a large border town. When the FRSE refused, Russian troops occupied the land.
In January 2003, large protests broke out around the country, most notably in the capital of Stalliongrad. The protests were calling for a democracy and civil rights for ponies. The FRSE cracked down, deploying the military around the country. The Main Six were also placed on house arrest for participating in a protest. As the situation deteriorated, Russian troops began to occupy more land. Then, on the day of August 20th, 2003, the president of the FRSE was assassinated. The FRSE officially dissolved in December. A new, democratic, government formed called the "Republic of Equestria" (RoE) in February 2004. The RoE promptly fell into Chaos. A small power struggle occurred until Russian Spetsnaz stormed the capital and made Equestria a Russian puppet state called the "Equestrian Federation" (EF) on January 1st, 2005. The EF cedes Manehatten and the surrounding area to the Russian Federation in October. One month later in November, the EF joined the UN.
In January 2006, the Main Six were officially released from house arrest. They were given their old homes back after living in an apartment building. Twilight Sparkle formed a new political party that wanted to restore the monarchy. It quickly gained popularity and became the 3rd largest party, after the Russian-backed United Equestria and the Communist Party of Equestria. In July, Twilight became the Vice Chairman (pony?) of the State Duma (the first pony in the position of Vice Chairman). Just 4 days after Twilight became Vice Chairman, her monarchist party surpassed the Communist party in terms of popularity.
The other 5 of the main six (except Pinkie Pie) joined/created other parties or stayed out of politics. Fluttershy joined the Green Party and became their Presidential ticket, constantly speaking out against industrialization and the disregard for nature. Rarity abstained from politics. Applejack joined United Equestria, seeing it as the only party that actually did anything to help ponies. Rainbow Dash also abstained from politics, but slightly dabbled in the Communist Party, simply to compete with Applejack. Rainbow Dash also founded the Wonderbolts Reborn, a government-sponsored stunt flying group that participated in parades and other events.
By 2007 everything was looking up for Equestria. The economy stabilized, leading to an economic boom never seen before in Equestria. Earth Ponies became the ruling class due to them controlling Equestria's main export: Agriculture. Due to the Earth Ponies knack for farming and way with nature, Equestria became a major supplier of agricultural products across the globe. Ever since 1970 when Equestria started exporting agriculture, "Equestrian Apples" were the most widely craved fruit in the Eastern bloc. When they started to go to the rest of the world in 1992, they were very, very popular. Especially in the United States. Equestrian Apples were the 19th most popular food in the US in 2007. One Earth Pony became the 9th richest person in the world with a net worth of 24.7 billion US Dollars. Equestria became quite prosperous, until The Great Recession of December 2007-2009