The Democrat Party was founded in 1946 to oppose the ruling Republican People's Party, which had established the Turkish Republic and had remained in power from the founding of the Republic through 1950. Its founding members were all well-respected figures in the CHP before breaking off and establishing the Democrat Party. For this reason, both political parties had ideologies rooted in Kemalism which prevented the DP from differing substantially in practice from its predecessor, although it held notable variances in platform. Additionally, the DP still had to function within the confines of the 1924 constitution established by Atatürk and the first parliament which restricted the distance they could put between themselves and the CHP.
The main differences in platform between the two lay in economic policy. While the CHP was guided by statism, the Democrat Party was more interested in privatizing state industries that had helped jump-start the Turkish Republic after World War I now that the country was no longer nascent. The Democrat Party did not repudiate the Republican People's Party's policy of Westernization, but did not pursue it with quite the same vigour. It was also less militantly secular than the Republican People's Party, and championed populism which gained it wide support among Turkey’s intelligentsia.
The party's logo, a galloping white horse, comes from the strong resemblance of the foreign word Demokrat to the Turkish words Demir Kırat, "Iron Kırat". The horse Kırat was a character in popular Turkish legend; it was the horse and trusted companion of Köroğlu, a Robin Hood-type hero who championed causes of the common people against the oppressive regime. Demokrat and Demir Kırat were often interchanged by the peasantry. The peripheral populations began to view the Democrat Party as the supernatural hero protecting their rights just as in the folklore.
The events and outcome of World War II played a large role in the emergence of the Democrat Party. A condemnation of fascism coincided with the defeat of the Axis Powers, and Prime Minister İsmet İnönü realized that if he did not invite opposition against the CHP, Turkey would fall into social upheaval: one-party governments were no longer acceptable means of rule for modern states. On November 1, 1945, İnönü made a speech in which he formally invited the formation of opposition parties in order to align Turkey with the democratic principles that had emerged victorious in the war. But other factors were already at work in undermining the rule of the Republican People’s Party— namely, the stagnant nature of the economy. Within the CHP and throughout the country, a rift was forming between statists and liberals, and that rift was magnified with the passage of the land reform bill of 1945. Although the bill was passed, dissent within the CHP led to the expulsion of three party members who then banded together to form the new Democrat Party that same year.
Due to the Democratic Party’s infancy and its inability to fully organize or establish rapport with the Turkish public immediately after its conception, they lost the 1946 national elections with no surprise. In the four years that spanned before the next election, İnönü and the CHP tried desperately to reaffirm their popularity in the Republic, but voters were unconvinced that the party could implement any real change after 27 years in power.