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The indigenous population was relocated into settlements while conquistadors, friars and native nobles were granted estates in exchange for their services to the King, They were given the privilege to collect tribute from its inhabitants. In return, the encomienda were to provide military protection to the inhabitants; however, the system was abused and was largely replaced by administrative provinces by 1700.

The encomienda system of government used by Spain was disliked by the inhabitants, which resulted in uprisings. A system of forced labor was also a result of the encomienda system of government.

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