In the later Vedic period the tribal organizations changed its identity and gradually shifted to the territorial identity. This territorial identity was gradually strengthened in the 600 BC with the rise of large states. The formation of bigger kingdoms made the king or the chief more powerful. Tribal authority became territorial and towns became the seat of the power. Instead of copper weapons the kings started using iron weapons and horse drawn chriots. Therefore from the 6th century BC the widespread use of iron in east ern UP and western Bihar led to the formation of large territorial states.
The new agricultural tools and implements enabled the peasants to produce a good amount of surplus which not only met the military needs but also the administrative requirements. The people became content with these material advantages and started settling permanently in their land. Towns came into existence as centres of industry and trade. People owed their allegiance to the territory to which they belonged and not to the Jana or the tribe to which they belonged. These areas of settlements were now regarded as janapadas or states. In transition from tribe to monarchy, janapadas lost the essential democratic pattern of the tribe but retained the idea of government through an assembly representing the tribes. These states consisted of either a single tribe such as Shakyas, Koliyas, Mallas etc or a confederacy of tribes such as Vrijis, Yadavas, Panchalas etc. Each janapada or state tried to dominate and subjugate other janapada to become mahajanapadas.