The aim of the paper is to discuss how and why the Knossian centralized state system collapsed and, collaterally, the evidence of this collapse is used to infer the existence of a centralized state system in LM IA Crete. LM IA Crete seems to have all the characteristics of an early (primary, segmentary) 2 state. The Santorini eruption (LM IA/IB) had a direct impact on its fragile structures. During the following period (LM IB), there is evidence for significant disruptions and almost all Minoan centres, even those not on Crete, were destroyed. These destructions appear carefully planned to eliminate as many administrative centres as possible. The main questions of our research are: Can the LM IA Knossian polity be considered as a state? How did it operate? What happened during the LM IB period, which structures collapsed and which survived? We conclude that the centralized power which had controlled almost the whole island during the LM IA period should be considered a state, which collapsed during the LM IB period. The Santorini eruption was the key-factor in speeding up the decline of the early LM I state.