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What were the rules followed by the British East India Company while occupying the Indian States?

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The Company did not launch an attack on a territory or state it did not know. It appointed its Residents in the Indian states. These Residents were their agents and they had to serve in the best interest of the Company and were used to interfere in the internal affairs of the state. States were not allowed to have an independent army; they were protected by the Companys army. The states had to pay for the maintenance of the army and if they failed to do so, a part of their territory was confiscated in lieu of the payment.

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