Mir Osman Ali Khan declares himself independent
The Indian States system, created by the British, was one and indivisible. While the other Princely States realized this and acceded to the Union, the Nizam, Mir Osman Ali Khan asserted an independence which was not justified by historical evidence or by the actual position. And in the dying struggle of an institution which was doomed to death, he went down before the inevitable forces of history.
In 1947, when the British handed power to India New Delhi, Mir Osman Ali Khan actually declared himself independent. The idea of acceding to India or even to Pakistan was contrary to his concept of his State's power and dignity, and the State was, in his view, inseparable from himself.
By putting forth a claim to independence, the last Nizam, Mir Osman Ali Khan rejected the advice of his own constitutional advisers, including Sir Walter Monckton, a close friend of Louis Mountbatten, who hoped to ensure that Hyderabad enjoyed a high status in the Indian Union. Thus Mir Osman Ali Khan asserted an independence which was not justified by historical evidence by the actual position.
Even prior to the declaration of independence the Nizam had his plans clear. In his scheme of things, if Pakistan came into existence there would be more than one Union or unit in India, and, in such circumstances, and in view of its size, population and resources, the claim of Hyderabad to form an independent unit could not be denied. If, on the other hand, some form of organic Union is formed for India, it would be in the interests of Hyderabad that the Centre should be weak and be given the least scope compatible with the idea of a federation.
Mir Osman Ali Khan's attitude towards other Princes of India
The fate and policy of the other Princes of India were no concern of his and he regarded them as nobleman to whom certain courtesies were due. This attitude showed the Nizam's lack of realism. The Indian States system, created by the British, was one and indivisible; it drew no distinction between the big and small rulers. But the Nizam lived in bygone times when the Mughal Emperors called the ancient rulers of Rajasthan mere zamindars.
If the Nizam had little realism, he had less knowledge of history. He could never realize that Hyderabad owed its birth to the turmoil of 18th century politics in India; its continued existence to the spoon-feeding by the foreign power. When he saw that the British had decided to withdraw from the country, he thought that he could easily fill the vacuum of power by communal fascism, with himself as its head and symbol.
Mir Osman Ali Khan's Downfall
Throughout the eighteen months during which India was being integrated, the Nizam was master of the situation in Hyderabad, except during the last few days before the Police Action. The delegations which went to and fro, the pinch-beck Feuhrer and his Razakars, the Laik Ali Ministry and the army, only played their allotted part in an orchestra, of which the Nizam was the conductor.
When viewed in the context of the process which transformed India into a free and united nation, the Hyderabad episode was an unhappy one. Unlike the princes of other native States, the Nizam could not stand the test, and in the dying struggle of an institution which was doomed to death, he went down before the inevitable forces of history.