Under the reform, all daimyos (大名, daimyō, feudal lords) were required to return their authority to the Emperor Meiji and his house.
The movement was spearheaded by Kido Takayoshi of the Chōshū Domain, with the backing of court nobles Iwakura Tomomi and Sanjō Sanetomi.
In return for surrendering their hereditary authority to the central government, the daimyos were re-appointed as non-hereditary governors of their former domains (which were renamed as prefectures), and were allowed to keep ten percent of the tax revenues, based on actual rice production (which was greater than the nominal rice production upon which their feudal obligations under the Shogunate were formerly based).
Furthermore, hereditary stipends to their samurai retainers were paid out of the prefectural office by the central government, and not directly by the governor, a move calculated to further weaken the traditional feudal ties.
This was considered an increasing threat to central authority by Ōkubo Toshimichi and other members of the new Meiji oligarchy, especially with the large number of ex-samurai revolts occurring around the country.