Around 2000 BC a new political system was established with authority concentrated around a central figure – a king. The first large palaces were founded and acted as centers for their respective communities, while at the same time they developed a bureaucratic administration which permeated Minoan society. Distinctions between the classes forged a social hierarchy and divided the people into nobles, peasants, and perhaps slaves.

After its tumultuous beginning, this was a peaceful and prosperous period for the Minoans who continued to trade with Egypt and the Middle East, while they constructed a paved road network to connect the major cultural centers. This period also marks the development of some settlements outside the palaces, and the end of the extensive use of tholos tombs.

The palaces of the period were destroyed in 1600 BC by forces unknown to us . Speculation blames the destruction either on a powerful earthquake, or on outside invaders. Some now suggest a passage of a possible Planet X may have triggered cataclysms on earth around 3600 years ago.