The prerequisites and conditions that shaped the relations between territorial princes and Jews in the early modern period lay in the territorialization and commercialization of Jewish protection rights (Judenschutzrechte), which were characteristic of the late Middle Ages. By grant or assignment of interest, or through purchase, the territorial princes as well as cities gained possession of these rights, which permitted them to admit and expel Jews, to impose taxes on them, and to “use” them. Although the emperor continued to claim the right to be the Jews' highest patron and to collect taxes accordingly, cities and territorial princes were the de facto political authorities that determined the conditions of life for Jews in the late Middle Ages.

Until far into the fifteenth century, the large economically and politically powerful cities played the leading role. These were usually imperial cities (Reichsstddte) , where the larger Jewish communities had developed. Before the start of the sixteenth century, however, most of these cities chose to terminate their relations to the Jews by expelling them and thus gave up their potential influence in the shaping of Jewish policy.

The territorial princes, in contrast, often had to rely on the cooperation and support of the cities in forming their protective relationship to the Jews. They deliberately settled individual families where the economy needed them and utilized their economic potential to the advantage of the regional centers of power. In addition to these individual families, entire Jewish communities received privileges or protection documents specific to a particular location.