dominion was first fixed and whence it issued out into spacious radiation – the East India Company resolved, in 1687, to assume independent jurisdiction within their own settlements, to fortify them, to coin money, to collect customs, and to act, in short, as a self-governing body within their own limits. They now began to enlist a native militia for the purpose of using their chartered right of protecting themselves by reprisals against oppression or direct attack, and of fighting for their own hand in quarrels with the local governors or petty chiefs. The new system thus introduced contained the germ out of which these scattered trading settlements eventually expanded into wide territorial dominion; and the incipient weakness of the Moghul Empire furnished both the motives and the opportunity for the change.
So long as the imperial administration prevailed up to the limits of its farthest Indian provinces and was effectively felt on either seaboard, the English merchants were quite satisfied with licenses allowing them to compound for the export duties, with grants of land for building their factories, and with other privileges for which they paid readily while they got their money's worth. But the outlying possessions of the empire were now no longer peacefully subordinate. The Maratha chief Sivaji was ranging about the Deccan, invading the Karnatic, and dominating the whole upper line of the west coast, not excluding the seaports and settlements held by Europeans. In 1664 he had pillaged Surat, where the English factory was bravely
