The Empire occupies the west and south of Tamriel in the Age of Industry canon. At present it is being ruled by the Senate, after the death of its last ruler - Emperor Maximus II.
After the Great War with the Thalmor, the Imperial Empire was broken and ruined, reduced to a fraction of its former self. When Titus Mede II was assassinated by the Dark Brotherhood, the Mede line was broken, and the Empire crumbled.
In 4E 446 the Imperial general Kamodus staged a coup to remove the Thalmor from power in Cyrodiil. After this he gathered support, particularly form Skyrim, who were desperate to remove the Thalmor from their lands. This growing army eventually gathered enough numbers to take on Alinor with a full frontal assault, and were successful. This war became known as the Kamodus Campaign.
After the Thalmor were broken, Kamodus recreated the Cyrodiillic Empire, now known simply as the Empire, which encompassed all of Tamriel, like it had in the Third Era.
Thus began the Fifth Era.
The Kamodus lineage continued to rule Tamriel, marrying nobles from all of the provinces, so as to keep them all bound by marriage.
However, in 5E 566 an alliance between the Khajiits and the Argonians managed to split the Empire in two, creating the kingdom of Samarkand. The Empire continued as it had before, but there were many wars with Samarkand, in the hopes of fixing the broken Empire.
The Empire was originally all of Tamriel, but after the split with Samarkand, is now much reduced in size. It occupies the old political brders of High Rock, Hammerfell, Valenwood, Summerset Isle (now known as Alinor), and most of Cyrodiil.
After Kamodus formed the Empire, it was ruled by him and his descendants. They were all Emperors and Empresses, and had complete control over the land. This remained the same for hundreds of years. While many were annoyed with this ultimate power, it proved to be mostly beneficial for the Empire.
With the death of Emperor Maximus II and the disappearance of Princess Marya, the Empire had no living heirs. Marya's children with Louis Syphre II were not yet born, and it would take at least ten years before they would be old enough to rule.
All of the nobles, both major and petty, disputed over who should rule in their place, and this argument frequently formed conflicts. Eventually, in early 6E 184, the decision was made to form the Senate, which is made up of all of the major nobles and politicians. This body governs the Empire through diplomatic rule, with new laws and decisions having to be made by a significant majority vote.