The party was founded in 1964 as successor to the German Reich Party (German: Deutsche Reichspartei, DRP). Party statements also self-identify the party as Germany's "only significant patriotic force". On 1 January 2011, the nationalist German People's Union (German: Deutsche Volksunion) merged with the NPD and the party name of the National Democratic Party of Germany was extended by the addition of "The People's Union".
The party is usually described as a neo-Nazi organization, and has been referred to as "the most significant neo-Nazi party to emerge after 1945". The German Federal Agency for Civic Education, or BPB, has criticized the NPD for working with members of organizations which were later found unconstitutional by the federal courts and disbanded, while the Federal Office for the Protection of the Constitution (German: Bundesamt für Verfassungsschutz), Germany's domestic security agency, classifies the NPD as a "threat to the constitutional order" because of its platform and philosophy, and it is under their observation. An effort to outlaw the party failed in 2003, because the government had a large number of informers and agents in the party, some in high position, who had written part of the material used against them.
Since its founding in 1964, the NPD has never managed to win enough votes on the federal level to cross Germany's 5% minimum threshold for representation in the Bundestag; it has succeeded in crossing the 5% threshold and gaining representation in state parliaments 11 times, including one-convocation entry to 7 West German state parliaments between November 1966 and April 1968 and two-convocation electoral success in two East German states of Saxony and Mecklenburg-Vorpommern between 2004 and 2011. Since 2016, the NPD is again not represented in state parliaments. Udo Voigt led the NPD from 1996 to 2011. He was succeeded by Holger Apfel, who in turn was replaced by Udo Pastörs in December 2013. In November 2014, Pastörs was ousted and Frank Franz became the party's leader. Voigt was elected the party's first Member of the European Parliament in 2014.
The NPD also endorses certain beliefs about human nature. NPD leader Udo Voigt states that the philosophy of the NPD differs from both communism and social liberalism in that it acknowledges people as unequal products of their societies and environments, largely governed by what is called natural law.
The NPD calls itself a party of "grandparents and grandchildren" because the 1960s generation in Germany, known for the leftist student movement, strongly opposes the NPD's policies. The NPD's economic program promotes social security for Germans and control against plutocracy. They discredit and reject the "liberal-capitalist system".