Final answer:
The formation of the People's Party in 1891 was largely due to the economic hardships faced by farmers, high tariffs, and the national depression beginning with the Panic of 1893, which fostered a collective class-based movement seeking relief from the two-party system.
Step-by-step explanation:
A significant factor that contributed to the formation of the People's Party, also known as the Populist Party, in 1891 was the economic distress experienced by farmers, leading to a demand for relief outside of the traditional two-party system.
With the agriculture sector suffering from issues such as overproduction and high tariffs and the onset of a nationwide depression that began with the Panic of 1893, a large number of farmers and industrial workers began to see the Populist Party as a potential solution.
The party garnered success by promoting a class-based message that resonated with workers and farmers alike, advocating for their collective interests against what they viewed as the domination of bankers and capitalists.