After Köppen, others took over the trading monopoly, though the economy suffered as a result of the war between Denmark and Sweden. During this period of the monopoly most Faroese goods (wool products, fish, meat) were taken to the Netherlands where they were sold at pre-determined prices. However, the guidelines of the trading agreement were often ignored or corrupted. This caused delays and shortages in Faroese supplies. Subsequently they produced poorer quality goods, and received poorer quality goods themselves. With the trading monopoly nearing collapse smuggling and piracy were rife. Denmark tried to solve the problem by giving the Faroes to Christoffer von Gabel (and later on his son, Frederick) as a personal feudal estate. However, von Gabel was harsh and repressive, breeding much resentment from the Faroese. This caused Denmark, in the 17th century, to take the islands and trading monopoly back themselves. However, they too struggled to keep the economy going, and many merchants were running at a loss. Finally, on the 1st January 1856 the trading monopoly was abolished.

Denmark retained possession of the Faroes at the Peace of Kiel in 1814, but lost Norway.

In 1816 the Løgting (the Faroese parliament) was officially abolished and replaced by a Danish judiciary. Danish was introduced as the main language, whilst Faroese was discouraged. In 1849 a new constitution came into power in Denmark. This new constitution was announced in the Faroes in 1850, giving the Faroese two seats in the Rigsdag (Danish parliament). However, the Faroese managed to re-establish the Løgting as a county council with an advisory role in 1952, with many people hoping to eventually achieve independence. The late 1800's saw increasing support for the home rule/independence movement, though not all people supported it. Meanwhile, the Faroese economy was growing with the introduction of large-scale fishing. The Faroese were allowed access to the large Danish waters in the North Atlantic. Living standards subsequently improved and there was a population increase. Faroese became a standardised written language in 1890.

During the Second World War Denmark was invaded and occupied by Nazi Germany. The British subsequently took control of the Faroes to stop the same thing happening to the Faroes and thus losing important shipping lines. The Løgting was set up as a legislative body, with a Danish prefect retaining executive power. The Faroese flag was recognized by British authorities. Some people tried to declare complete independence in this period.