Through this system, the Indian Princes of these Native States were assured of protection from internal or external aggression, through deployment of company troops. In return they had to pay for the maintenance of those troops and also accept a British Resident in their court.
This arrangement provided protection for the Indian Princes of these Native States against both internal and external aggression through the deployment of British troops.  In exchange, they were obligated to cover the costs associated with maintaining these troops and to welcome a British Resident into their court.