The Galactic Alliance-in-exile refers to the government established in 41 ABY by Cha Niathal, the former Joint Chief of State Number One. This government emerged after the Second Battle of Fondor, with the purpose of maintaining the remnants of what was then regarded as the Old Order following its displacement by a New Order.
During the events of the Second Battle of Fondor, the pre-existing discord between Cha Niathal, holding the position of JCOS-1, and Jacen Solo, known as JCOS-2, escalated into open hostility. Subsequently, both figures attempted to relieve the other from their respective commands. Solo asserted his authority as a Chief of State over a Supreme Commander, while Niathal countered by invoking her seniority as an Admiral in contrast to a Colonel.
Following his retreat to Coruscant, Darth Caedus, formerly known as Solo, declared the Galactic Capital and the remaining forces of the Galactic Alliance under his control as the sole Chief of State. Niathal, finding herself in command of her fleet and the battle-damaged world of Fondor, and recognizing the futility of engaging in a direct fleet confrontation above Coruscant, proclaimed the formation of an Alliance-in-exile. She established its headquarters at Fondor and assumed leadership.
With the conclusion of the war marked by the demise of the Dark Lord, the Alliance-in-exile was reintegrated into the primary structure of the Galactic Alliance. This reunification occurred as the Galactic Alliance transitioned to new leadership through an upcoming election, effectively ending the period of exile.