The character of the Maratha confederacy was despotic. Hence the absolute sovereign became the sole authority of the Maratha state. At that very time due to the absence of a settled constitution the administrative machinery became one of oppression under the weak rulers. Peshwa Baji Rao II and Daulat Rao Sindhia, who controlled the supreme government at Poona, could not retain the integrity of their Empire. Moreover the Peshwa Baji Rao II wanted to retain his position by his foul play. Baji Rao II signed the treaty of Bassein with the company and entered in the subsidiary Alliance with the company. In this way he projected all the Maratha chiefs to the enemy camp. Thus he bartered away the independent sovereignty of the Maratha confederacy. Daulat Rao Sindhia was an unworthy successor of Mahadaji Sindhia. He also proved incompetent in administration. Perhaps Holkar was one of the ablest rulers. The ultimate result was that under these weak rulers the Maratha confederacy became an instrument of oppression and misrule. The total absence of the efficient personalities was an important cause for the breakdown of the Maratha supremacy.
The economic policy of the Maratha state was not conducive to set up a stable political set up. During the long wars against Aurungzeb, the Maratha people had been uprooted. The peasants have given up cultivation and joined the profession of a soldier. During the early Peshwas the wars of the state was financed by the plunder of the territories conquered. The collection of Chauth and Sardeshmukhi from dependent territories also provided the financial support for the wars. Thus the Maratha Empire subsisted not on the resources of Maharashtra but on the taxes levied on the newly acquired state. Whenever the Maratha kingdom became expanded, this source of income was dried up. Due to the expansionist policy of the Marathas, the provinces they acquired were completely crushed. The economy of those provinces was broken down. Hence the sources of income from these territories were also dried up. Moreover it the Maratha state had to co-operate with the princes from whom the tribute was exacted. The later Maratha rulers made the situation worse by the civil wars. The civil wars however ruined the economy of Maharashtra. Finally in the Anglo- Maratha war, the Marathas did not have the enough finance to put arms against the English. In 1804 there was a terrible famine and also the Maratha chiefs became economically bankrupt. Thus the Maratha leadership failed to evolve a strong economic policy with the changing needs of the time. Hence the inefficient economic machinery was also an important cause of the failure of Maratha power before the Company.
When the Maratha Empire was in its zenith, even then the Maratha were a lose confederation under the leadership of the Chatrapati and later the Peshwas. Initially the Peshwas seized the powers of the Chatrapati. Later in the same way the warlords usurped the power of the Peshwa. Powerful chiefs like the Gaekwar, Sindhia, Bhonsle, and Holkar carved out the semi-independent kingdom for them. When the Poona government weakened after the disaster of Panipat, the feudal units were broken down. Those disintegrated feudal units were engaged in the internal conflicts. There was irreconcilable hostility between Sindhia and Holkar, while the Bhonsle Raja of Nagpur was claimed for the kingship of the Maratha Empire. Mutual jealousies between the Maratha chiefs prevented them to offer a united resistance to the East India Company. To meet their own selfish needs, the Maratha chiefs support the intervention of the English in the Maratha administration. Thus the lack of corporate spirit of the Maratha chiefs was considerably an important cause for the downfall of the Marathas.
The military strength of the Marathas was extremely lacking in comparison to the English. Though not lacking in the personal prowess and valor the Maratha confederacy lacked the effective organization of forces, in war weapons, in disciplined action and efficient leadership. The tendencies of divided command, improper organization and treachery of the Maratha chiefs played the foremost part for the Maratha failure in the Anglo-Maratha wars. Moreover the mercenary soldiers of the Marathas had no higher motive than the mere personal interest. To them the loss of a battle meant at worst temporary loss of employment to them. Moreover the espionage system of the Marathas was extremely weak than the English. Thus the military intelligence of the Marathas was hampered. In this way the weak military set up also considered as one of the significant causes of the defeat of the Maratha power in the Anglo-Maratha wars.
The English were much more superior than the Marathas in the tactical policies and diplomatic administration. The English before starting the actual operation played the fair game of winning allies' and isolating the enemies. The lack of unity and co-operation among the Maratha chiefs considerably simplified the task of the British. In the second Maratha war the English won over the Gaekwar and the Southern Maratha Jaigirdars to their side. Then the English won over the Peshwa by their side by the treaty of Bassein. Through these diplomatic gains the Company got the supply of bases at Poona. Thus the company became able to overthrow the supremacy of Sindhia from his territories at Ahmednagar and Bhrauch. Similarly the alliance with the Southern Jaigirdars provided them the easy communication with the British army and the supply base at Seringapatnam. Therefore the diplomatic policy of the British was somewhat responsible for the defeat of the Marathas in the Anglo Maratha war.
Apart from these reasons the socio-economic and the political conditions of the country was extremely anarchic, which led the British to meddle in the administration of the Maratha confederacy. Consequently, the administrative power of the Maratha Empire was used as an instrument by the English to put arms against the Marathas. Moreover the weak administration, military strength and the lack of efficient leadership crushed the violent Maratha confederacy completely.
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