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The name comes from William III of Britain (Willem II of the United Provinces of the Netherlands, Prince of Orange), and is kept because his victory over the Jacobites is considered to have laid the foundation for the evolution of Constitutional Democracy in the British Isles.
This though is part of the mythology with which the organisation surrounds itself. The much vaunted Battle of the Boyne (the casualty figures for which must stand as the lowest ever for a battle of such a scale - of the 40 000 or so participants, under 2 000 died, mostly as a result of heat exhaustion) was regarded in its time as a minor affair in the UK (the Anglo-Dutch fleet was all but destroyed by the French two days later off Beachy Head) - only in Europe was it treated as a major victory. The reason for this was that it was the first proper victory in battle for the League Of Augsburg[?], the first ever alliance between Catholic & Protestant countries, and in doing so William of Orange and Pope Innocent (its prime movers) scotching the myth that such an alliance was blasphemous, resulting in more joining the alliance & in effect ending the very real danger of a French conquest of Europe. In terms of the war in Ireland, James II fled at this point, and the conflict (now led by Jacobite captain Patrick Sarsfield) metamorphisised into one for Irish independence.
Furthermore, the so-called "Bill of Rights" passed after William's succession was more to do with Parliament sequestrating Royal powers for their own (the battle between Crown & Parliament over which would be the more dominant stretched back to the reign of Charles I), and non-Anglican Protestant ministers were fined £10 or jailed for preaching.
There is little doubt that the organisation is sectarian in both origins and intent, with its membership being largely more interested in obsessing themselves in conspiracy theories of Vatican based plots to take over the world in-between intimidating Catholics in their local communities. It should come as no surprise that the founders of the Ku Klux Klan were Scottish immigrants that had been Orange Order members.
In the 1990s the Orange Order has frequently caused confrontations as members have attempted to celebrate the date of the Battle of the Boyne (on the 12th July by the old Julian Calender - although in today's calender the 1st July is the correct date) by marching through mainly Catholic neighbourhoods. As British neo-Nazis are debarred from deliberately marching though mainly non-white areas of mainland Britain (as a result of the 1977 Lewisham riot), it has been a long sore point in the UK as to why the Orange Order to this day is allowed to deliberately cause upset.
The political wing of the Orange Order is the Ulster Unionist Party, although changes in the party's membership structure mean it is fast losing its grip: for example, a former Grandmaster of the Orange Order - the Reverend Martin Smyth - & the current deputy Grandmaster (& deputy of the UUP) Geoffrey Donaldson, look set to be expelled from the party in the summer of 2003 for insubordination, despite both being Members of Parliament for many years.
There are two related organisations, the increasingly left-wing militant Apprentice Boys of Derry (named ironically after Catholic guild apprentices who refused entry & held off a besieging French army from entering Derry), whose foundations lie in urban working-class Protestant communities, and the Royal Black Preceptry. The sinister name of the latter is misleading, as they have been the most willing of the marching groups not to enter so-called "Catholic" areas (instead they march to the start of any contentious road, the lodge master shake hands with a waiting representative of the local community - usually the Chair of the local Residents Association). There is some dispute as to the RBP's origins, some suggesting that they are descended from the remenants of the Knights Of The Order Of St John, a crusading Knights Templar order that once controlled Malta.
The Orange Order played an important role in the history of Canada where it was established in 1830. It was the chief social institution in Upper Canada (today's southern Ontario) and organized many community and benevolent activities. It also helped Protestant immigrants settle. The Order remained a predominant political force in southern Ontario well into the twentieth century. A notable exception to Orange predominance occurred in London, Ontario, where Catholic and Protestant Irish formed a non-sectarian Irish society in 1877.
The Orange Order played an important role in the crisis over the 1885 trial of Louis Riel for treason. The Canadian prime minister of the day, Sir John A. Macdonald is believed to have refused to commute Riel's death sentence because he calculated that there were more Orange votes to be got by hanging Riel than there were Quebec votes to be got by sparing him. He is famously quoted as saying "Riel must die though every dog in Quebec bark in his favour." This and similar interventions of the Orange Order in Canadian politics helped create the bitter divisions between French and English which characterize Canadian politics to this day.