This chapter provides a broad historical context of the princely states through the final years of the British Empire in South Asia. It explains the origins of the princely states, the nature of their relationship with the British government as the paramount power, how British policy towards the princely states changed over time, how the British colonial authorities administratively engaged with them, and the basis of the princes’ understanding of their sovereignty. The chapter begins with an explanation of the development of British paramountcy through the eighteenth and nineteenth centuries, beginning with the treaties between the East India Company and the successor states that emerged in the wake of the decline of Mughal authority. These treaties formed the basis of Princely India following the imposition of Crown rule in 1858. This section continues with an explanation of how British paramountcy over the princely states functioned and changed over time, leading up to the efforts to create an All-India Federation in the 1930s, helping to show the multilayered approach to British rule in South Asia that underpinned the princely states’ sovereignty. The chapter concludes with an analysis of the inherent tensions and ambiguity in the relationship between the princely states and the colonial government.