Three centuries separate the high point of Vijayanagara authority and the establishment of undisputed British rule in south India. There were also interior towns which came to thrive as the political centres of 'nāyka kingdoms'. The encouragement of foreign trade by the pre-Talikota Vijayanagara rulers was seen to be vital for the access which such trade gave these rulers to horses, firearms, and foreign soldiers. The rise of new centres of power in the macro-region under nāykas and their subordinates, pālaiyakkaras in Tamil, pālegādus in Telugu, and pālegdras in Kannada, 'poligars' to the British - while weakening the Vijayanagara state, did stimulate economic activity and development. Throughout the turbulent period from 1550 to about 1700, there are repeated references to the plunder of accumulated treasure. The traders and some Brahmans emerged as the most active of the great merchants trading with and under the European companies on the Coromandel Coast in the seventeenth century.

The political fact of a new great overlordship in the southern peninsula, the Vijayanagara state, had significant and necessary implications for the economic order. The warriors who ruled from the city of Vijayanagara on the very northern edge of the macro-region gradually converted Tamil country to a region of exploitation. The Vijayanagara nayaksystemconstituted a significant modification of the segmentary state of the Chojas. It was a system whose antecedents may be found in the earlier politico-military arrangements of the Hoysala kingdom of Karnataka and the Kakatlya kingdom of Andhra. Various political and military arrangements in Vijayanagara society had consequences regarding agrarian relationships. According to Vijayanagara historians, three tenurial categories existed in Vijayanagara times: amara, bhandaravada, and manya; and they refer to the manner in which the shares of income from villages were distributed. Some large temples which held income shares in many villages as devadana maintained an irrigation works department for the precise purpose o.

Urbanism is a distinctive feature of the economic history of later medieval south India. The Vijayanagara state was based upon heavily fortified administrative centres often under the control of warriors and Brahmans who were strangers to the place. Brahmadeyas of the Chola period were settlements of great size and wealth under the control of an assembly of Brahmans. Temples of the post-Chola period became centres of pilgrimage necessitating a variety of facilities seldom before demanded. Kānci was a focal point for many of the sectarian and caste activities of the central Tamil plain just as Tirupati was for the northern portions of the plain and as Palni, Nanjunad, and Perur for the southern and western parts of the interior upland of the macro-region. An independent stimulus to urban development was military. Vijayanagara, the capital city of the empire from 1340 to 1565, was one of the greatest fortified cities of all of India.