The most potent political grievance was the Doctrine of Lapse, under which Dalhousie annexed Satara, Jharkhand (Sambalpur), Udaipur, Nagpur and Jhansi when rulers died without natural heirs. Awadh, the largest princely state and a loyal ally, was annexed in 1856 on the flimsy charge of 'misgovernment'.

The Company also refused the pension and titles of Nana Saheb, adopted son of the last Peshwa Baji Rao II, and treated the aged Mughal emperor Bahadur Shah Zafar as a pensioner whose heirs would lose the imperial title. Rulers, nobles, talukdars and even common people perceived these acts as the extinction of Indian sovereignty.