Within weeks, Ahmad Shah Abdali retreated from India to his kingdom in Afghanistan. In the north, therefore, the power situation remained much as it had been previously, consisting of armed local lineages (Jats, Sikhs, Bundelas, and Rajputs), and the two major powers (Shuja-ud-daula of Awadh and Najib-ud-daula, the representative of Abdali). The difference, of course, was the Maratha loss of money, credit, manpower, and prestige. These problems were exacerbated by a loss of leadership at the center; Nana Saheb Peshwa died within weeks of the defeat of Panipat. In addition, several major leaders had been killed, and there were succession disputes within these families. Even in the eighteenth century, bad news travelled fast; Panipat produced results in every region that the Marathas controlled or from which they even irregularly extracted tribute. The defeat inspired rebellions by local armed lineages, invasion and subversion by neighboring powers, and factionalization and bids for power at the center. As we shall see, however, the decade after Panipat was, overall, one of recovery of revenue areas, the rebuilding of military strength and prestige, effective leadership, and even some gains in conflicts with neighboring powers. Two themes became dominant in the decades after 1770, first, the shifting power relations between the center and the Maratha “states” (Shinde, Holkar, Gaikwad and Bhonsle) and, second, the emergence of the English as the main competitor on the subcontinent.

Let us begin with the factional problems at the capital, then survey the outlying areas. On the death of Nana Saheb Peshwa, his second son, Madhav Rao, received investiture. As he was only seventeen years old, it was understood that his uncle, Ragunath Rao, would share, or perhaps dominate, power.