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Parliament is the legislative branch of government in what is now the United Kingdom (and was only Great Britain in 1775). The monarch's power is granted and managed by Parliament. Then as now, Parliament was composed of two houses. The House of Lords was and is composed of members of the British peerage (or nobility) who inherit their positions and the House of Commons was and is elected, with members representing various geographic areas.
The issue of representation was huge for the American colonies, because they weren't allowed to send members to Parliament, but Parliament could make laws that affected them. During the era of the American Revolution, the London-based parliament reserved the right to legislate for the entire British Empire and to overrule laws the colonists made for themselves. While George III and Lord North were certainly involved, Parliament was the group making most of the decisions that led to war.