The initial insight into the benefits and beauty of introducing democratic governance by children into a school can be traced to the work of Homer Lane, an American educationalist, who worked with delinquent children in England. In 1913 Lane founded a farm community for delinquent children in Dorset, England. He called it the "Little Commonwealth." This was the first educational institution which featured broad and meaningful participation of children in the democratic governance of their lives and their community. Lane’s methods in dealing with the children at the Little Commonwealth were based on respect and equality. His approach was non-coercive and non-authoritarian. However, it had notable therapeutic effects on the children who attended. The Little Commonwealth operated from 1913 until 1918.

A.S. Neill, the eventual founder of Summerhill School visited the Little Commonwealth in 1917 and was profoundly influenced by what he saw and by Lane’s theories. Neill called his visit with Homer Lane the turning-point of his life.

Homer Lane was also an early exponent of the psychological studies of Freud and his Vienna School. These innovative approaches to understanding character development and psychological processes had a significant effect on Lane’s understanding of the challenges presented by and the needs of the children who attended the Little Commonwealth. Lane was a firm believer in the innate goodness of children. He acquainted Neill with Freud's `New Psychology' and later became Neill's psychoanalyst.

Thus Homer Lane and the Little Commonwealth introduced A.S. Neill to two elements that were essential to the founding of Summerhill: the self-government meeting, and the importance of a child's emotional well-being over academic development.

These insights of the Little Commonwealth have significant influence in the approaches of Summerhill, Sudbury Valley and The New School, though the emphasis and interpretation placed on them differs subtly in the practices of each school. Significantly Neill’s approach was intentionally therapeutic. Sudbury Valley denies an intentional therapeutic role, but recognizes and appreciates the psychological benefits of its program. The New School takes a flexible view and seeks to articulate both psychological needs and benefits as they apply from time to time to individual members of the School. Intentional attempts to meet specific psychological needs might be undertaken by members of The New School, or even by the Judicial Committee. However, there is no systematic therapeutic effort, beyond the benefits of freedom and community for a living human being.

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