Taiwan's President Tsai Ing-wen nevertheless resigned as the chairwoman of the DPP following the election, and assumed responsibility for the significant defeat.
The DPP lost seven of the 13 cities and counties it now holds - the special municipalities of Taichung and Kaohsiung, Chiayi City, and Yilan, Yunlin, Changhua and Penghu counties - to the opposition Kuomintang (KMT).
In all, the DDP, which going into the election controlled 13 cities and counties out of a total of 23, retained only six cities and counties, while the KMT, which controlled six cities and counties, won nine more regions, bringing the total under its jurisdiction to 15.
Tsai has said she wants to maintain the status quo with China but will defend Taiwan's security and democracy.
To win back support, several analysts said Tsai should move closer to the US, which sells weapons to Taiwan to defend against forceful unification by the mainland.
The Beijing-friendly main opposition Kuomintang (KMT) made gains in the face of China's increasing pressure on the island, which it sees as part of its territory to be reunified. While ballots were still being tallied, the count on the Central Election Commission's website as of 10:30 p.m. indicated the public was likely to reject proposals to grant same-sex couples equivalent rights to heterosexual couples and to allow Taiwanese athletes to compete under the name "Taiwan" at the Tokyo Olympics in 2020 rather than "Chinese Taipei".
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Since 2000, election results show the major Taiwanese parties have alternated in ruling for two terms, with power shifting every eight years.
Ting Shou-chung said on Sunday he was disputing the results, which gave a narrow victory to incumbent mayor Ko Wen-je, an independent.
With the conservative vote passing the threshold of 25% of eligible electors, under referendum law the government must take steps to reflect the result.
Asked to comment on whether the results will change Beijing's Taiwan policy, Chang Wu-ueh (張五岳), a professor of China Studies at New Taipei-based Tamkang University, predicted that there will be no major changes for the time being. Beijing has been ratcheting up pressure on the island it claims as its own territory by poaching its diplomatic partners and barring its representatives from worldwide gatherings, while staging threatening military exercises and limiting the numbers of Chinese tourists visiting Taiwan. The size of the swing was evident in the popular vote: On Saturday, KMT candidates won 48.8 per cent of the overall vote, compared to 39.2 per cent for the DPP.
The Nationalists had campaigned on a pro-business platform, while also advocating a more conciliatory line toward Beijing. Taiwan has functioned as a sovereign state since the Second World War but China insists that it is a rebel province.
Taiwan also opposed changing the country's name in worldwide sporting competitions, Focus Taiwan reported.
Supporters of the opposition nationalist KMT celebrate in Kaohsiung, Taiwan, on Saturday. It was symbolic in nature, as the International Olympic Committee had ruled out a name change, which would be opposed by China. The government has said it will still press on with new laws but they may now be weaker.