After the fall of the Roman Empire, Europe fell into a general state of decentralization. While the Roman Empire did not have the most centralized bureaucracy, it had still provided Roman Europe with a sense of centralized authority and order. The "Germanic" peoples who migrated into Europe at times attempted to replicate this centralization. For example, the Carolingian Empire briefly managed to create a bureaucracy under King Charlemagne. In England, Anglo-Saxon kings were more successful in creating a coherent state with local governance, setting England on a slightly different political trajectory than the rest of Europe. For much of the Middle Ages, Europe was characterized by a feudal system in which rulers of various kingdoms (like France and England) exchanged land for service.
In the absence of centralized power, feudalism emerged to maintain social cohesion. Kings granted fiefs (grants of land) to vassals (nobles/lords) in exchange for service and loyalty. These vassals therefore did not own the land, but they did extract certain privileges (like taxes) from their holdings, and they could grant parts of their landholdings to their own lesser vassals. So the process could become very decentralized. A king might grant a fief to a duke, for example, who then might grant a fief to a lesser lord (like a baron), who then might operate as lord of a manor, overseeing a rural estate worked by peasants.
In the Middle Ages, peasants comprised 80 to 90 percent of the population. Most peasants did not own the land they worked—instead, they worked manor lands owned by a lord, often giving up a portion of their crop. Many peasants were serfs: peasants who were legally bound to work a lord's estate. They could not leave the land and had few rights.
Medieval Europe was divided into kingdoms and states that often competed with one another. Feudalism perpetuated this system, as lords amassed their own armies and sought to increase their own power and resources. While there were kings—the King of France, the King of England, etc—they were fairly weak. Lords served as a check on monarchical power. In England, for example, nobles forced King John I to agree to the Magna Carta in 1215, recognizing that the king was not above the law and that he had to respect certain rights of the nobility. During the Hundred Years' War, rival noble families in France became embroiled in a civil war over control of the throne. As nobles became more powerful, monarchs were often forced to share power by working with deliberative bodies (assemblies) like Parliament in England, the Cortes in Spain, and the Estates General in France. Monarchs often looked to these assemblies to approve taxation, especially to finance wars. Meanwhile, in the Holy Roman Empire (which was really more of a coalition of various German kingdoms), the emperor was elected by German princes called electors. The Holy Roman Emperor therefore lacked the ability to form a truly centralized state, especially since German princes often competed with the emperor or one another for power.
As towns and cities grew thanks to the expansion of agriculture and trade, Europe also underwent a "Commercial Revolution." Technological and commercial (business/trade) advances from Asia reached Europe largely via Muslim intermediaries, further contributing to growth. A new social class emerged—burghers, or townspeople (usually merchants and artisans)—leading to the formation of guilds (associations) that purchased town charters. Purchasing a charter granted a town a degree of autonomy, allowing the town to oversee things like local courts and taxation. As they grew, these towns also started to demand their own political representation. Especially in the wake of the Black Death, monarchs and nobles faced popular uprisings when they enacted unpopular economic policies. Taxation was a particularly difficult issue. While rulers in China and the Middle East were able to bring in significant tax revenue, the popular phrase in Europe was "the king must live of his own." The king was supposed to draw revenue only from his own domains, not from his Christian subjects. The one exception was if the tax was for expenses for the common good.
As feudalism declined in the 15th century, monarchs would finally increase their own power at the expense of the nobility and the Church, forming early modern states like Spain, France, and England and ushering in the "early modern period."