By the time that Qin had totally collapsed, Xiang Yu was China's hegemon. He allotted governance of different parts of the country to various men. Some, like Tian An of Qi and Wei Bao of Wei, were descendents of the prior kings of those areas, while people like Wu Rui of Hengshan were given their posts based upon distinction. All of them had full control of their own forces and were largely free to pursue their own policies.
Liu Bang was one of these kings, and some of the others submitted to him in the fight against Xiang Yu. Liu Bang also relied upon three key generals - Han Xin, Peng Yue and Qing Bu - each of whom were promised the position of king as the condition for their assistance. Thus, at the formation of Han, Liu Bang found his territory full of kings who commanded the loyalty of their forces and expected a great deal of autonomy as reward for their services. While he had his own military force (the conscript Southern Army and the professional Northern Army, both based in Changan) and could theoretically command the kings as he pleased, the size of their territories made practical enforcement of this difficult. As Qing Bu demonstrated, it was quite feasible for a king to revolt and be a genuine threat to the empire. Liu Bang therefore spent a lot of time removing the various kings (either by plots or putting down rebellions) and replacing them with his relatives (Wu Rui was eventually the only non-relative king remaining).
Even with relatives in charge, the central government could be at the mercy of the kings, as demonstrated by the rebellion of seven kings under the reign of Emperor Jing. One of the responses to this was an imperial decree that territory should be split up between a king's sons rather than passing in full to a single heir, announced with the excuse that the Emperor was acting out of kindness to all princes but really intended to dilute the power of kings and limit their ability to threaten the Emperor.
Another was the establishment of commanderies in locations that inhibited the kings' ability to cooperate. Commanderies had existed from the start of Han and were headed by centrally appointed officials. Initially, many commanderies were near the capital Changan, but as time passed, they were established also in strategic locations such as between potentially troublesome kings and along the empire's frontiers.
A key part of the power of Liu Pi, the leader of this rebellion, was his ability to mint his own coins and the abundant ore available to do so from his territory. Eventually, this power was removed and all minting of currency was done within three central offices (there were still counterfeit coins, but they couldn't be made on a scale that could sustain a rebellion).
- Records of the Grand Historian, Sima Qian, translated by Burton Watson (Han I and Han II volumes)
- Military Culture in Imperial China - Chapter 3: The Western Han Army: Organization, Leadership and Operation, Michael Loewe