Lore: White-Gold Concordat
The White-Gold Concordat was a treaty signed in 4E 175 between the Empire and the Aldmeri Dominion that ended the Great War. The conditions of the treaty outlawed the worship of Talos in the Empire, formally disbanded the Blades, and delivered a large portion of southern Hammerfell into the control of the Aldmeri Dominion. Emperor Titus Mede II made these concessions to the Thalmor hierarchy in order to give the Imperial Legion time to recover its strength, as it had been decimated in the Battle of the Red Ring.
The Redguards of Hammerfell, however, refused to accept the terms of the White-Gold Concordat, and continued to resist the Thalmor. This forced Titus Mede to officially renounce Hammerfell as a province of the Empire in order to preserve the peace stipulated in the treaty. Viewing this as a betrayal, Hammerfell became an independent state, and managed to fight the Dominion to a standstill, culminating in the signing of the Second Treaty of Stros M'Kai five years later in 4E 180, which resulted in all Aldmeri forces withdrawing from Hammerfell. Hammerfell thus became an independent, if devastated, nation. Diplomatic relations between Hammerfell and the Empire remain strained, an outcome that Legate Justianus Quintius postulates was a long-term goal of the Thalmor.
Specifically, the ban enforced regarding the worship of Talos greatly angered the people of Skyrim. The Stormcloak Rebellion began when Ulfric Stormcloak and his men were arrested at Markarth by the orders of the Thalmor, due to them demanding free Talos worship from the Legion. The Talos ban was not enforced in the province prior to this event, and at the time of the Incident, Ulfric was considered a cooperative Thalmor asset.