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Abstract Shrub encroachment has far‐reaching ecological and economic consequences in many ecosystems worldwide. Yet, compositional changes associated with shrub encroachment are often overlooked despite having important effects on ecosystem functioning. We document the compositional change and potential drivers for a northern Namibian Combretum woodland transitioning into a Terminalia shrubland. We use a multiproxy record (pollen, sedimentary ancient DNA, biomarkers, compound‐specific carbon (δ13C) and deuterium (δD) isotopes, bulk carbon isotopes (δ13Corg), grain size, geochemical properties) from Lake Otjikoto at high taxonomical and temporal resolution. We provide evidence that state changes in semiarid environments may occur on a scale of one century and that transitions between stable states can span around 80 years and are characterized by a unique vegetation composition. We demonstrate that the current grass/woody ratio is exceptional for the last 170 years, as supported by n‐alkane distributions and the δ13C and δ13Corg records. Comparing vegetation records to environmental proxy data and census data, we infer a complex network of global and local drivers of vegetation change. While our δD record suggests physiological adaptations of woody species to higher atmospheric pCO2 concentration and drought, our vegetation records reflect the impact of broad‐scale logging for the mining industry, and the macrocharcoal record suggests a decrease in fire activity associated with the intensification of farming. Impact of selective grazing is reflected by changes in abundance and taxonomical composition of grasses and by an increase of nonpalatable and trampling‐resistant taxa. In addition, grain‐size and spore records suggest changes in the erodibility of soils because of reduced grass cover. Synthesis. We conclude that transitions to an encroached savanna state are supported by gradual environmental changes induced by management strategies, which affected the resilience of savanna ecosystems. In addition, feedback mechanisms that reflect the interplay between management legacies and climate change maintain the encroached state.