The circumstances which led to the Fourth Mysore War can be summarized as follows: Tipu Sultan wanted to avenge his humiliating defeat and the terms imposed on him by the British. He also aimed at making Mysore a strong state. Tipu worked continuously to secure help to fight British imperialism. He took efforts to seek the help of the France, Arabia, Kabul and Turkey. He corresponded with the Revolutionary French Government in July 1798. At Srirangapattinam, a Jacobian Club was started and the flag of the French Republic was hoisted. The tree of Liberty was also planted. Later, when Napoleon came to power, Tipu received a friendly letter from Napoleon (who was in Egypt at that time).
It was at this juncture that Wellesley reached Calcutta with a mind already filled with fear of Napoleon. Therefore, he prepared for a war against Mysore. As a part of his strategy, Wellesley tried to revive the Triple Alliance of 1790 with the Marathas. Though his proposal was not accepted by the Marathas, they promised to remain neutral. However, a Subsidiary Alliance with the Nizam was concluded by the British and as a consequence, the French force at Hyderabad was disbanded.
Wellesley set out to persuade Tipu to accept a pact of subsidiary alliance and wrote letters requesting the Tipu to dismiss the French, to receive an English envoy, and to make terms with the Company and its allies. Tipu paid scant attention to Wellesley's letters and thus the Fourth Anglo-Mysore war started.
The war was short and decisive. As planned, the Bombay army under General Stuart invaded Mysore from the west. The Madras army, which was led by the Governor-General's brother, Arthur Wellesley, forced Tipu to retreat to his capital Srirangapattinam. Although severely wounded, he fought till his capital Srirangapattinam was captured and he himself was shot dead.
With the fall of Tipu Sultan the kingdom of Mysore fell at the feet of Wellesley. He restored Hindu rule at the central part of the kingdom. A five year old boy, Krishnaraja III, a descendant of the dethroned Hindu Raja, was enthroned at Mysore, which became the capital almost after two hundred years. Purnaiya, the previous minister, became Diwan. The remaining parts of the kingdom were divided between the British and the Nizam. The whole of Kanara, Wynad, Coimbatore, Dharmapuri and Srirangapattinam were retained by the British whereas the Nizam was given the areas around Gooty and a part of Chittoor and Chitaldurg districts. A British Resident was stationed at Mysore. Tipu's family was sent to the fort of Vellore.
The only power that remained outside the purview of the subsidiary system was the Marathas. Nana Fadnavis provided the leadership to the Marathas. He was responsible for the preservation of independence of his country from the onslaught of the British. By extending a helping hand to Cornwallis against Tipu he was able to acquire a large slice of territory as the share of the Marathas from the kingdom of Mysore. His death in 1800 removed the last great Maratha leader.
Peshwa Baji Rao II, despite his stately appearance and immense learning, lacked political wisdom. The infighting among the Maratha leaders proved to be self-destructive. Jaswant Rao Holkar and Daulat Rao Scindia were fighting against each other. The Peshwa supported Scindia against Holkar. Holkar marched against the Peshwa. The combined forces of Scindia and the Peshwa were utterly defeated. The city of Poona fell at the feet of the victor who did not hesitate to commit all sorts of atrocities, including the torturing of rich inhabitants. With rich booty Holkar returned to his capital.
Peshwa Baji Rao II was in great danger, so he fled to Bassein where he signed the Treaty of Bassein with the British in 1802. It was a subsidiary treaty and the Peshwa was recognized as the head of the Maratha kingdom. Although it was nominal, the treaty was considered the crowning triumph of Wellesley's Subsidiary System. In accordance with this document, the foreign policy of the Marathas came under British control and therefore any action of the Maratha chiefs against the British was successfully prevented. That is the reason why the Marathas considered the treaty as a document of surrendering their independence.
As an immediate, theresponse to the Treaty of Bassein British troops marched under the command of Arthur Wellesley towards Poona and restored the Peshwa to his position. The forces of Holkar vanished from the Maratha capital.