Civil war ensued when the "first reincarnation" of Ngawang Namgyal, Jigme Dakpa, was recognized as the shabdrung in 1728. A rival claimant, however, was promoted by opposition forces supported by Tibet. The Tibetan-backed forces were defeated by Jigme Dakpa's supporters, but the political system remained unstable. Regional rivalries contributed to the gradual disintegration of Bhutan at the time the first British agents arrived.

In the early eighteenth century, Bhutan had successfully developed control over the principality of Cooch Behar. The raja of Cooch Behar had sought assistance from Bhutan against the Indian Mughals in 1730, and Bhutanese political influence was not long in following. By the mid-1760s, Thimphu considered Cooch Behar its dependency, stationing a garrison force there and directing its civil administration. When the druk desi invaded Sikkim in 1770, Cooch Behari forces joined their Bhutanese counterparts in the offensive. In a succession dispute in Cooch Behar two years later, however, the druk desi's nominee for the throne was opposed by a rival who invited British troops, and, in effect, Cooch Behar became a dependency of the British East India Company.

Data as of September 1991