A.) The Situation Preceding the Rebellion
In the 1840es, the EAST INDIA COMPANY, facing financial difficulties, expanded rapidly into Hindustan and the Punjab. A huge force of Indian soldiers called SEPOYS (sipahis), commanded by British officers, was to protect and secure the newly acquired territories.
B.) The Cource of Events
The LEE-ENFIELD RIFLE had been newly introduced in 1857. The complex process of loading required that Sepoy soldiers would have to use teeth to pull bullets out of their cartridges. These had been greased in animal fat (pig fat, beef tallow), to the horror of both Hindu and Muslim soldiers. Beginning in MEERUT, the Sepoy soldiers rebelled. NANA SAHIB, son of the last Maratha prince, was denied by the EIC succession to his father; he then lead an army of rebellious Sepoys against EIC troops in the BATTLE OF KANPUR (Cawnpore, May-June 1857); the battle turned into a massacre. Nana Sahib was victorious; by July he controlled Gwalior. Siege was laid to LUCKNOW (taken August 31st, where another massacre took place). Delhi fell in early September.
EIC (British) forces then retook Delhi (Sept. 20th) and laid siege to Lucknow, which fell in November. Peace was signed on July 8th 1858. Nana Sahib died in battle in 1859.
One consequence was that the EIC was broke; its attempt to avoid bankrupcy by an aggressive policy of expansion had thus failed. The EIC was succeeded by the British government, which held on to the recent EIC acquisitions in the Ganges and Indus valleys. Britain established direct colonial rule over the more productive provinces of India, while being content with INDIRECT RULE over the remaining principalities of the subcontinent.
British diplomacy was somewhat more subtle than that of the EIC in the 1840es and 1850es, considering Indian religious traditions and respecting the rights of native dynasties.