The second period of Otto's rule began in March 1844, when in the aftermath of the military coup, Otto convened a national assembly to draft a constitution. When the assembly finished its work that spring, a new system of government was established. Otto would henceforth rule as a constitutional monarch. A bicameral legislature would be elected by all property-holding males over twenty-five. In theory Greece became one of the most democratic states in Europe. Otto, however, retained the power to appoint and dismiss government ministers, to dissolve parliament, to veto legislation, and issue executive decrees.

Instead of promoting political parties, parliamentary democracy spawned a new factionalism based on the patronage of prominent individuals. The politics of personality was exemplified by the career of Ioannis Kolettis, who was appointed prime minister under the new system in 1844. Kolettis managed parliament and achieved a virtual monopoly of administrative power by use of lavish bribes, intimidation, and a keen sensitivity to public opinion. Kolettis also originated the Megali Idea (Great Idea), the concept that Greeks must be reunited by annexing Ottoman territory adjacent to the republic. Otto's inability to fulfill the Megali Idea was a major cause of his downfall.

Irredentism was the single idea that united the disparate factions and regions of Greece following independence. The Megali Idea influenced all of Greek foreign policy through the nineteenth century. As early as the late 1830s, Greek insurgent movements were active in Thessaly, Macedonia, and Epirus, and by 1848 Greece and the Porte were on the brink of war over raids by Greek privateers into Ottoman territory.

The Crimean War appeared to offer an opportunity for Greece to gain major territorial concessions from the sultan. Expecting that Russia would defeat the Ottoman Empire in this war, Otto sent Greek troops to occupy Ottoman territory in adjacent Thessaly and Epirus under the pretext of protecting Balkan Christians. However, Britain and France intervened on the side of the Porte, and in 1854 British and French occupation of the port of Piraeus forced Otto to relinquish his "Christian cause"--a humiliation that drastically curtailed his power. Radical university students narrowly failed to assassinate Queen Amalia in 1861, and a military revolt in 1862 was only partially suppressed. Finally, in another bloodless coup later that year, Otto was forced to abdicate the throne.