Indirect rule is a term used by historians and political scientists to describe a system of governance that was developed in certain British non-colonial dependencies (particularly in parts of Africa and Asia) often called "Protectorates" or "Trucial states". By this system, the day-to-day government and administration of areas both small and large was left in the hands of traditional rulers, who gained prestige and the stability and protection afforded by the Pax Britannica, at the cost of losing control of their external affairs, and often of taxation, communications, and other matters, usually with a small number of European "advisors" effectively overseeing the government of large numbers of people spread over extensive areas.
British African Empire
The ideological underpinnings, as well as the practical application, of indirect rule in Kenya and Nigeria is usually traced to the work of Frederick Lugard, the High Commissioner of the Protectorate of Northern Nigeria from 1899 to 1906. In the lands of the Sokoto Caliphate, conquered by the British Empire at the turn of the century, Lugard instituted a system whereby external, military, and tax control was operated by the British, while most every other aspect of life was left to local pre-British aristocracies who may have sided with the British during or after their conquest. The theory behind this solution to a very practical problem of domination by a tiny group of foreigners of huge populations is laid out in Lugard's influential work, The Dual Mandate in British Tropical Africa.
Britain's Asian empire
The largest application of Indirect rule was in British Asia, in hundreds of pre-colonial states, first seen at work under the East India Company's system of subsidiary alliances in the Indian subcontinent. The areas thus brought into the British sphere of influence became known as the Indian Princely States. Subsequently the same principle was applied in strategic regions on the sea routes to India, especially in the Persian Gulf protected states.
In the British colonies, the laws were typically made by a British Governor and legislative council, but in the protectorates and princely states local rulers retained their traditional administrative authority and ability to legislate, subject to British control of certain areas. Indirect rule was particularly effective in enabling the British to exploit natural resources and raw materials of vast subordinate nations. The establishment of naval and military bases in strategic points around the globe maintained the necessary power to underpin such control.
Practical implementation of indirect rule
Indirect rule was cheaper and easier for the European powers, and in particular it required fewer administrators, but it did have a number of problems. In many cases, European authorities empowered local traditional leaders, as in the case of the monarchy of Uganda, but if no suitable leader could be found (in the traditional Western sense of the term), the Europeans would simply choose local rulers to suit them. This was the case in Kenya and Southern Nigeria, and the new leaders, often called "warrant chiefs", were not always supported by the local population. European elites also often chose local leaders with similar traits to their own, despite these traits not being suited to native leadership. Many were conservative elders, and thus indirect rule fostered a conservative outlook among the indigenous population and marginalised the young intelligentsia. Written laws, which replaced oral laws, were less flexible to the changing social nature, old customs of retribution and justice were removed or banned, and the removal of more violent punishments in some areas led to an increase in crime. Furthermore, leaders empowered by the governments of European powers were often not familiar with their new tasks, such as recruitment and tax.
From the early 20th century, French and British writers helped establish a dichotomy between British Indirect rule, exemplified by the Indian princely states and by Lord Lugard's writings on the administration of northern Nigeria, and French colonial direct rule. As with British theorists, French colonial officials like Félix Eboué or Robert Delavignette wrote and argued throughout the first half of the 20th century for a distinct French style of rule that was centralized, uniform, and aimed at assimilating colonial subjects into the French polity. French rule, sometimes labeled Jacobin, was said in these writings to be based on the twin ideologies of the centralized unitary French government of the Metropole, with the French colonial ideology of Assimilation. Colonial Assimilation argued that French law and citizenship was based on universal values that came from the French Revolution. Mirroring French domestic citizenship law, French colonial law allowed for anyone who could prove themselves culturally French (the "Évolués") to become equal French citizens.    In French West Africa, only parts of the Senegalese "Four Communes" ever extended French citizensip outside a few educated African elite. This was contrasted with British Indirect Rule, which never foresaw subject Protectorates becoming legally assimilated into "the home nations".
Academics since the 1970s have problematised the Direct versus Indirect Rule dichotomy, arguing the systems were in practice intermingled in both British and French colonial governance, and that the perception of indirect rule was sometimes promoted to justify quite direct rule structures. 
Mahmood Mamdani and other academics have discussed extensively how both Direct and Indirect rule were attempts to implement identical goals of foreign rule, but how the "Indirect" strategy helped to create ethnic and racial cleavages within ruled societies which persist in hostile communal relations and dysfunctional strategies of government.
Some political scientists have even expanded the debate on how direct versus indirect rule experiences continue to effect contemporary governance into how governments which have never experienced colonialism rule.
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Sources and references
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