III. Policy of Subordinate Isolation (1813-1857)

Now, the imperial idea grew and the theory of paramountcy began to develop—Indian states were supposed to act in subordinate cooperation with the British government and acknowledge its supremacy. The states surrendered all forms of external sovereignty but retained sovereignty in internal administration. British Residents were transformed from diplomatic agents of a foreign power to executive and controlling officers of a superior government.

In 1833, the Charter Act ended the Company’s commercial functions even as it retained political functions. It adopted the practice of insisting on prior approval/sanction for all matters of succession. In 1834, the Board of Directors issued guidelines to annex states wherever and whenever possible. This policy of annexation culminated in usurpation of eight states by Dalhousie including some big states such as Satara and Nagpur.