Treaty and Subsidiary Alliance:
The Asaf Jah kings entered into a treaty and subsidiary alliance with the British on October 12, 1800, which made Hyderabad a subsidiary state under British influence.
British Residency:CC A British Resident was based in Hyderabad to advise the Nizam, particularly on matters of great importance, such as naming the Prime Minister.
Financial Crisis and Reforms:
The financial condition of Hyderabad deteriorated sharply during the reign of Nizam IV, amassing enormous debts by 1853.
The British took Berar—one of the five Subhas ruled by the Nizam—as part of the debt settlement.
Mir Turab Ali Khan, also known as Salar Jung I, was appointed Diwan (Prime Minister) and carried out reforms, the effects of which were such that the state’s financial health was greatly improved by the time of his death in 1883.
Assistance rendered to the British during the 1857 Sepoy Mutiny:
The Fifth Nizam (Afzal-ud-Daula) gave the British unconditional support during the 1857 Sepoy Mutiny, counselled by Salarjung I.In gratitude for their assistance, the British returned to the Nizam the districts of Osmanabad (Naldurg) and Raichur and also wrote off a debt to the tune of 50 lakh rupees.At that time, the income from these two districts was 21 lakh rupees per annum.
Honorary Recognition: In 1961, the Nizam was awarded the GCSI (Grand Commander of the Order of the Star of India) by the British.
Administration
Under the first king of the Asaf Jahi dynasty, Nizam-Ul-Mulk, there were 6 Subhas:
1. Aurangabad
2. Berar
3. Bijapur
4. Bidar
5. Hyderabad
6. Khandesh.