Before 1917, members of the British Royal Family had no surname, but only the name of the house or dynasty to which they belonged.
Kings and princes were historically known by the names of the countries over which they and their families ruled. Kings and queens therefore signed themselves by their first names only, a tradition in the United Kingdom which has continued to the present day.
The names of dynasties tended to change when the line of succession was taken by a rival faction within the family (for example, Henry IV and the Lancastrians, Edward IV and the Yorkists, Henry VII and the Tudors), or when succession passed to a different family branch through females (for example, Henry II and the Angevins, James I and the Stuarts, George I and the Hanoverians).
Just as children can take their surnames from their father, so sovereigns normally take the name of their 'House' from their father. For this reason, Queen Victoria's eldest son Edward VII belonged to the House of Saxe-Coburg-Gotha (the family name of his father Prince Albert). Edward VII's son George V became the second king of that dynasty when he succeeded to the throne in 1910.
In 1917, there was a radical change, when George V specifically adopted Windsor, not only as the name of the 'House' or dynasty, but also as the surname of his family. The family name was changed as a result of anti-German feeling during the First World War, and the name Windsor was adopted after the Castle of the same name.
At a meeting of the Privy Council on 17 July 1917, George V declared that 'all descendants in the male line of Queen Victoria, who are subjects of these realms, other than female descendants who marry or who have married, shall bear the name of Windsor'.
The Royal Family name of Windsor was confirmed by The Queen after her accession in 1952. However, in 1960, The Queen and The Duke of Edinburgh decided that they would like their own direct descendants to be distinguished from the rest of the Royal Family (without changing the name of the Royal House), as Windsor is the surname used by all the male and unmarried female descendants of George V.
It was therefore declared in the Privy Council that The Queen's descendants, other than those with the style of Royal Highness and the title of Prince/Princess, or female descendants who marry, would carry the name of Mountbatten-Windsor.
This reflected Prince Philip's surname. In 1947, when Prince Philip of Greece became naturalised, he assumed the name of Philip Mountbatten as a Lieutenant in the Royal Navy.
The effect of the declaration was that all The Queen's children, on occasions when they needed a surname, would have the surname Mountbatten-Windsor.
For the most part, members of the Royal Family who are entitled to the style and dignity of HRH Prince or Princess do not need a surname, but if at any time any of them do need a surname (such as upon marriage), that surname is Mountbatten-Windsor.
The surname Mountbatten-Windsor first appeared on an official document on 14 November 1973, in the marriage register at Westminster Abbey for the marriage of Princess Anne and Captain Mark Phillips.
A proclamation on the Royal Family name by the reigning monarch is not statutory; unlike an Act of Parliament, it does not pass into the law of the land. Such a proclamation is not binding on succeeding reigning sovereigns, nor does it set a precedent which must be followed by reigning sovereigns who come after.
Unless The Prince of Wales chooses to alter the present decisions when he becomes king, he will continue to be of the House of Windsor and his grandchildren will use the surname Mountbatten-Windsor.