The encomienda is a Spanish institution of Roman origin, and in the New World, the Spanish government establishes a series of rights and obligations between the encomendero (grantee) and the people under his care.

The indigenous people are required to provide tribute and free labor to the encomendero, who is responsible for their welfare, their assimilation into Spanish culture, and their Christianization.

Political and social stratification among the encomenderos is easily achieved by the simple fact that there are communities of different sizes.

The larger the grant, the larger the amount of tribute and labor available, and thus the greater the potential wealth and prestige of the assignment.

In reality, the native population had been accustomed to a similar organization of tributary towns under the Aztec.