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It was a weak alliance headed by Austria. It was created by peacemakers at the Congress of Vienna. The government of each German state would be dismantled.
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Bismarck was appointed Prime Minister by King William I in 1862. He became chancellor within a decade. He used a "blood and iron" policy to unite the German states.
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Prussia and Austria formed an Alliance. They then seized provinces from Denmark. They liberated these provinces and split them between Austria and Prussia.
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It lasted seven weeks and ended in a Prussian victory. They then took control of north German states. Bismarck then dissolved the German confederation.
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Napoleon III was angry over the Prussian victory over Austria. He was angry over the rivalry between France and Prussia. The Germans were still angry over the invasions by Napoleon I. Napoleon III then declared war on Prussia and lost badly.
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The Second Reich was created and it was considered the heir to the Holy Roman Empire. A two-house legislature was set up by the new constitution drafted by Bismarck. Power remained in the hands of the emperor drafted by his chancellor.