The Thalmor had always been a powerful faction within Summerset Isle, but had also always been a minority voice. During the crisis, the Crystal Tower was forced to give the Thalmor greater power and authority. Their efforts almost certainly saved Summerset Isle from being overrun. They capitalized on their success to seize total control in 4E 22. They renamed the nation Alinor, which hearkens back to an earlier age before the ascendency of man. Most people outside of the Aldmeri Dominion still call it Summerset Isle, either out of peevishness or ignorance.
In 4E 29, the government of Valenwood was overthrown by Thalmor collaborators and a union with Alinor proclaimed. It appears that Thalmor agents had formed close ties to certain Bosmeri factions even before the Oblivion Crisis. The Empire and its Bosmer allies, caught completely off guard, were quickly defeated by the much-better prepared Altmer forces that invaded Valenwood on the heels of the coup. Thus was the Aldmeri Dominion reborn.
Shortly afterward the Aldmeri Dominion severed all contact with the Empire. For seventy years they were silent. Most scholars believe there was some sort of internal strife in Alinor, but very little is known of the factional struggles that went on inside the Dominion while the Thalmor consolidated its power in Summerset and Valenwood.
On the 30th of Frostfall, 4E 171, the Aldmeri Dominion sent an ambassador to the Imperial City with a gift in a covered cart and an ultimatum for the new Emperor. The long list of demands included staggering tributes, disbandment of the Blades, outlawing the worship of Talos, and ceding large sections of Hammerfell to the Dominion. Despite the warnings of his generals of the Empire's military weakness, Emperor Titus Mede II rejected the ultimatum. The Thalmor ambassador upended the cart, spilling over a hundred heads on the floor: every Blades agent in Summerset and Valenwood. And so began the Great War which would consume the Empire and the Aldmeri Dominion for the next five years.