This sets the state for further discussions between Masoud Barzani, the president of the Kurds, and Haider al-Abadi, Iraq’s prime minister.
The Iraqi government, most regional powers, the United States, and the United Kingdom are not happy with the referendum and generally oppose Kurdish independence. The Iraqi parliament has authorized the prime minister to use military force against the Kurds. So far, Iraq does not seem willing to let the Kurds have their state.
This puts the United States in a tough position. Israel and Russia supported the Kurdish referendum, the United States has partnered with the Kurds in the fight against ISIS, and the Kurds are more capable of defending their territory against ISIS than Iraqi forces theirs. To deny the will of the Kurdish people will cause them to seek other partners (such as Russia) and could see yet another front open up in the war in Iraq.
The Kurds are the fourth largest nationality in the Middle East. They speak Kurdish (which is related to the Iranian language group), trace their descent from the ancient Medes, and use a calendar whose starting date is set as 612 BC (when the Medes captured Nineveh of Assyria, which is near Mosul in northern Iraq). However, the modern Kurds have never possessed their own nation state. Instead, the fall of the Ottoman Empire after World War I left them dispersed within the borders of Iraq, Turkey, Syria, and Iran. Indeed, a significant portion of Turkish territory is occupied by Kurds (more background information here).
It is due to this large presence of Kurds in neighboring countries that these countries oppose independence for the Iraqi Kurds. They fear that an independent Kurdistan would eventually cause the Kurdish population in their own countries to desire annexation by Kurdistan.
Currently, the Kurdistan Region in Iraq is autonomous, with its own parliament in the city of Erbil in the North. It has a population of over 5 million, with a GDP of about $24 billion per year, and is considered fairly economically advanced and prosperous.
The Kurds have been in the forefront in the fight against ISIS with their military, the Peshmerga, consisting of 275,000 members and achieving much success in Iraq, while working in concert with Kurdish forces from neighboring countries. They are armed with an assortment of weapons provided by various countries (including the United States), such as various small arms, tanks, armored vehicles, artillery, anti-aircraft guns, and helicopters.
In 2014, the Peshmerga captured Kirkuk and its oil fields following the retreat of the Iraqi army in the face of ISIS’ advance. Since then, the Kurds have been exporting the oil from Kirkuk and have built an oil pipeline to Turkey to assist with these exports.
Thus, the Kurds have been operating as a defacto state since the fall of Saddam Hussein and have now voted to try to make it official. They can expect opposition in this cause, but presumably hope that they can eventually win support from the international community.