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"The territory made its debut in Olympic competition later that year at the 1968 Summer Olympics, and except for the boycotted 1980 Summer Olympics have appeared in every Summer Olympiad since." - I don't believe you need the comma. Also, "have" should be "has" ("The territory has").
"This made Munich the second appearance for the then British territory, that would not become independent from the United Kingdom until 1981." - the two parts of the sentence aren't really related. If you do keep it as one sentence, "which" would be better than "that".