Why Hay-on-Wye, pop. 1,500, went independent

While the Falkland Islands have captured international headlines during the past two months, the 1,500 citizens of the Independent Kingdom of Hay-On-Wye have been calmly sitting it out.

Revolution is no stranger to them. For years now, the fires of revolt have burned bright in this little town on the border of England and Wales - the first city in the British Isles to declare itself independent from ''the bureaucratic control of the central government.''

''Home Rule for Hay'' is the battle cry, and King Richard Booth is the sovereign of the new state - ruling from his familial estate, Brynmelin. A heavyset, intense fellow in his 30s, Booth runs his kingdom on a simple theory of independence:

''There are two methods of control - human, or bureaucratic.'' His revolution began in the face of a swelling centralization that Booth believes would have eventually destroyed the heritage of his hometown.

The roots of the revolt stem from Booth's return to Hay after a proper Oxford education. He set up a business that was to become the biggest in town - a used-book empire that has put Hay-On-Wye on the map of international bibliophilia.

But as his business flourished, Booth saw insidious changes taking place in Hay . . . the same changes that are occurring in small towns the world over in this century of Big Government.

In Booth's words: ''More drained and exploited than many corners of the British Empire, Hay was now burdened with a hundred bureaucratic bodies, from the Ministry of Agriculture to the National Parks Authority to the Welsh Town Council. All were guiding, advising, and planning while the town got poorer.''

The local bakery closed, and citizens started buying mass-produced loaves of soft, white Mother's Pride bread at the town's new supermarket. Farmers left their plots for the factory in nearby Hereford. Cafes started serving hamburgers and canned soup, instead of local specialties like the Reverend Kilbert's chutney or Bill Powell's ''faggots & peas.'' The badger-faced sheep and the Cusop Dingle snail became endangered species.

One night in the Wheatsheaf Pub, Booth and some like-minded friends agreed the time for drastic action was at hand. On April 17, 1979, Richard Booth declared himself King of the Independent Republic of Hay-On-Wye, and went to work appointing a Cabinet of ministers.

Chaos ensued. Rallies were held. The Castle burned down. Half the townspeople were with Booth . . . half against. But the independence flag kept flying.

Today, Hay-On-Wye still seems a quiet town to the casual visitor. But the fires of independence burn as bright as ever. The Tourist Authority and the Welsh Town Council go about their business, but not without constant challenges from the kingdom. King Booth continues to rule those who swear allegiance to Independent Hay from the grounds of Brynmelin, where his crown and sceptre rest in state.

Reverend Kilbert's chutney is being produced again. The Independence Times newspaper keeps the faithful advised of current movements in the realm. Some townspeople carry passports proclaiming their citizenship in the new republic.

How has Britain's Prime Minister Margaret Thatcher handled all this?

From the start, she has stonewalled, refusing to acknowledge that anything is amiss - that a revolution has actually taken place. Fortunately no lives have been lost in Hay . . . and the Cusop Dingle snail population is actually on the increase this year.

For those with revolutionary aspirations, the Hay kingdom offers a tempting participation plan. Contributions are welcome, but one can actually join the nobility of the Independent Republic for a mere pittance. Among the available titles:

Dukedom - ''$50 with a free subscription to Independence Times, heraldic scroll, free T-shirt, free copy of R. Booth's famous book on the Movement, postcard pack, and a free party at the Castle the first Monday of every month, plus other secret privileges.''

Knighthood - ''$3 with heraldic scroll only.''