In the ensuing Treaty of Lahore, the Sikhs were made to cede Kashmir and Hazara to the British, in lieu of their indemnity, and to recognize Gulab Singh as an independent Mahraja.
A week later, in the Treaty of Amritsar, Gulab Singh paid the British the indemnity that was due from the Sikhs, and acquired Kashmir in return.
The Valley of Kashmir, the most populous region, was a historically powerful kingdom, having stood up to the Arabs and the Afghan-Turk invaders, and remaining independent until the time of Akbar.
The Jammu division's eastern districts had a Hindu majority population culturally aligned to the Hill states of Himachal Pradesh.
Its western districts like Poonch, Kotli and Mirpur had a Muslim majority culturally aligned to the West Punjab plains.
The northern areas of Gilgit and Baltistan were almost entirely Muslim, with Buddhist minorities, culturally aligned to Pakhtun and Central Asian regions.
Hari Singh, the Maharaja of Jammu and Kashmir, chose to remain independent, offering to sign standstill agreements with both the dominions.
[7][8] In the spring of 1947, an uprising against the Maharaja had broken out in Poonch, an area bordering the Rawalpindi division of the West Punjab.
This came after the growth of socio-political tensions between the Dogra Maharaja of Kashmir, Hari Singh and the Muslim (mainly Poonchi) population and the spillover from neighboring Punjab.
The area's population, full of recently demobilized soldiers from the Second World War, rebelled against the Maharaja's forces and gained control of almost the entire district.
[10] Large scale massacres and expulsion of Hindus and Sikhs occurred in Mirpur, Bhimber, Muzaffarabad, Kotil, Poonch etc.
[11] The Provisional State of Azad (Free) Jammu and Kashmir was created on 24 October 1947 when a group of rebels (the 'Azad Army') announced its formation in the southwestern areas of J&K.
"[9] Attempts by the Maharaja to repress the uprising failed as more began to take up arms, as Poonch and parts of neighboring Mirpur and Muzaffarabad districts were lost.
[12] On 21 October, several thousand Pashtun tribesmen from the North-West Frontier Province poured into Jammu and Kashmir in order to liberate it from the Maharaja's rule.
The raiders captured the towns of Muzaffarabad and Baramulla, the latter just twenty miles northwest of the State's capital Srinagar.
Accordingly, on 26 October 1947, Maharaja Hari Singh signed an Instrument of Accession, handing over control of defense, external affairs and communications to the Government of India.
[15] Later, India approached the United Nations, asking it to solve the dispute, and resolutions were passed in favor of the holding of a plebiscite with regard to Kashmir's future.
Realizing the issue had become more complex, the Government of Pakistan established the Ministry of Kashmir Affairs (MKA) in Rawalpindi.
"[25] "Azad Kashmiris disliked, but endured, MKA officials’ often tardy treatment of them as this was the price to pay to join Pakistan.
[24] In 1970, Yahya Khan's military administration promulgated a 'rudimentary' constitution, 'The Azad Jammu and Kashmir Government Act, 1970' which provided AJK a presidential system, an elected legislative assembly and 'considerable' autonomy.
"[27] Danish Khan in The Friday Times characterizes this development as providing "an avenue for citizens to draw attention from political elites towards immediate socio-economic and developmental concerns such as access to basic infrastructure and public goods," further stating "while public sector investments in infrastructure and social sectors have shown relative improvements over the years, the overarching narrative in the political sphere, spanning across party lines, remains heavily focused on the Jammu & Kashmir conflict rather than indigenous socio-economic development.
[29] Antía Mato Bouzas writes, "Pakistan’s dealings with the Kashmir areas under its control, known at present as Gilgit-Baltistan and AJK, have revolved around two contradictory issues: the need to administer the territories already held, while at the same time persisting in the claim to the whole princely state."
This led to the upholding of the colonial status-quo in Gilgit Baltistan, which was ruled under the Frontier Crimes Regulation (FRC) until the 1970s, and less-so in AJK, recognized as a federal territory with its own constitution and semi-autonomous state.
Under Zulfikar Ali Bhutto, Gilgit-Baltistan was granted limited-self-administration, the judicial and tax powers of local rulers were removed, and the 'Subject Rule' which legally bound individuals as subjects of the princely state was suppressed, signaling a change from the commitment to the previous status-quo.
The Line of Control has remained unchanged[33] since the 1972 Simla Agreement, which bound the two countries "to settle their differences by peaceful means through bilateral negotiations."
Some claim that, in view of that pact, the only solution to the issue is mutual negotiation between the two countries without involving a third party, such as the United Nations.