Until the 1730's the king's Lord Chamberlain was able to exercise wide control over theaters, companies, and plays in England because the Master of the Revels was his subordinate, and so drama was brought into his jurisdiction. The Master of the Revels was the English court official who supervised court entertainment, and the position grew in importance and prestige until the theaters were closed from 1642 to 1660 due to Puritan opposition. When the theaters reopened, the power of the master was slowly stripped as the Lord Chamberlain began to create an authority founded on traditions. The power he exercised was not based on law, but enforced through penalties threatened to theaters which refused cooperate. His control only extended to companies operating under royal grants, and as patents became deregulated, the authority of the Lord Chamberlain was eroded.
The Licensing Act was a result of the social, legal, economic, and political conditions of the time, as well as the reactions to literary works that were dominated by these issues. It was a product of hostility towards drama and theaters arising from the still widespread religious opposition, tradesmen and merchants disapproval of playhouses, and general objections that the stage fulfilled audiences' cravings for vice, and encouraged passions and licentiousness. Political drama also plays a significant role in the passage of the act; literary historians tend to focus on the political reasons for, and neglect the economic, social, and legal influences on the act.
During 1736 and 1737, Jacobites were able to manipulate the stage. These people were supporters of the House of Stuart, and therefor enemies of the current government. Their control of the stage was part of a plan to create disaffection with the state, and ultimately overthrow the government in connection with the plan of James VII's son, Charles Edward Stuart of Scotland, to regain his family's former political position. They fostered satire that was personally offensive to the king, and his first minister Walpole. In particular, Fielding's Pasquin, is cited as a major cause of the Licensing Act because of its attacks on Walpole. Until 1733, Walpole had been able to regulate the theaters through the power of the Lord Chamberlain, the Treasury, or justices of the peace. As these controls lost force, satiric attacks on the king increased, dissatisfaction with his management grew, and his position became less secure. The Licensing Act was a direct countermeasure to suppress the Jacobite's actions, as well as a way for Walpole to salvage his authority and favor with the king, by halting dramatic performances that were considered seditious.
The first attempt at legislation regarding censorship, in 1735, failed to pass. In 1737, Walpole finally succeeded in passing the Licensing Act by using a particularly offensive play, The Golden Rump, to neutralize any remaining objections. The act gave legal force to the Lord Chamberlain's authority by giving him the power to license plays, and gave rise to the phrase "legitimate theater." It also succeeded in satisfying Walpole's effort to restore national stability and renew the king's confidence in him. These effects reduced the perceived threat of an impending Jacobite revolution.
The Licensing Act is considered to have had the most profound influence on English literature of any legislation in the past three centuries, and has served as a model for censorship in many other western societies. The Theaters Act that replaced it in 1843 extended its most controversial provision, which required government approval before any new play could be performed. The power of the Lord Chamberlain to license plays was not revoked until parliament passed the Theaters Act of 1968.