It is convenient to regard 1868 as marking a turning-point in the modern history of Japan. In January of that year a group of new leaders seized power in the then imperial capital of Kyoto, men who became, despite subsequent shifts in both policy and personnel, responsible for initiating changes which revolutionised the country's political, economic and social institutions and eventually raised it to a high level of international power and prestige.

Since the beginning of the seventeenth century government had been in the hands of a line of feudal rulers, the Tokugawa family. As shogun, nominally the emperor's military deputies, they had possessed the hereditary de facto authority of monarchs, exercising direct control over their own enormous domains and effectively subordinating the lords of the great feudal territories into which the rest of the country was divided. They sought, with remarkable success, to preserve their power by preventing change. After about 1640 Japan was by their decree almost entirely cut off from contact with the rest of the world, while at home political relationships were frozen in their seventeenth-century form, rigid social distinctions developed and were enforced for all classes of the population, and attempts were made to inhibit even economic change.

It was in its economic aspects that this policy was least successful. By the eighteenth century domestic commerce had expanded and the feudal class, the samurai, for the most part resident in castle-towns, had become accustomed to a higher standard of living. They had not, however, secured a commensurate increase in revenue or income. As a result, both domain governments and individual samurai became steadily more indebted to city rice-brokers and financiers.