The princely states were mostly run as unmitigated autocracy, with absolute concentration of power in the hands of the king. The burden of tax was usually heavier than in British India. There was much less of rule of law. There were some exceptions, e.g., states like Baroda and Mysore succeeded in promoting industrial and agricultural development, administrative and political reforms, and education to a considerable degree.

The Indian National Congress, in 1920, in its Nagpur resolution called upon the princess to grant full responsible government in their states.

However, Congress, while allowing residents of the states to become members of the congress, made it clear that they could not initiate political activity in the states in the name of Congress, but only their individual capacity or as members of the local organisations.