We find in the early Chou time the typical signs of true feudalism:  fiefs were given in a ceremony in which symbolically a piece of earth was handed over to the new fiefholder, and his instalment, his rights and obligations were inscribed in a “charter”.  Most of the fiefholders were members of the Chou ruling family or members of the clan to which this family belonged; other fiefs were given to heads of the allied tribes.  The fiefholder (feudal lord) regarded the land of his fief, as far as he and his clan actually used it, as “clan” land; parts of this land he gave to members of his own branch-clan for their use without transferring rights of property, thus creating new sub-fiefs and sub-lords.  In much later times the concept of landed property of a family developed, and the whole concept of “clan” disappeared.  By 500 B.C., most feudal lords had retained only a dim memory that they originally belonged to the Chi clan of the Chou or to one of the few other original clans, and their so-called sub-lords felt themselves as members of independent noble families.  Slowly, then, the family names of later China began to develop, but it took many centuries until, at the time of the Han Dynasty, all citizens (slaves excluded) had accepted family names.  Then, reversely, families grew again into new clans.

Thus we have this picture of the early Chou state:  the imperial central power established in Shensi, near the present Sian; over a thousand feudal states, great and small, often consisting only of a small garrison, or sometimes a more considerable one, with the former chieftain as feudal lord over it.  Around these garrisons the old population lived on, in the north the Shang population, farther east and south various other peoples and cultures.  The conquerors’ garrisons were like islands in a sea.  Most of them formed new towns, walled, with a rectangular plan and central crossroads, similar to the European towns subsequently formed out of Roman encampments.  This town plan has been preserved to the present day.

This upper class in the garrisons formed the nobility; it was sharply divided from the indigenous population around the towns.  The conquerors called the population “the black-haired people”, and themselves “the hundred families”.  The rest of the town populations consisted often of urban Shang people:  Shang noble families together with their bondsmen and serfs had been given to Chou fiefholders.  Such forced resettlements of whole populations have remained typical even for much later periods.  By this method new cities were provided with urban, refined people and, most important, with skilled craftsmen and businessmen who assisted in building the cities and in keeping them alive.  Some scholars believe that many resettled Shang urbanites either were or became businessmen; incidentally, the same word “Shang” means “merchant”, up to the present time.  The people of the Shang capital lived on and even attempted a revolt in collaboration with some Chou people.  The Chou rulers suppressed this revolt, and then transferred a large part of this population to Loyang.  They were settled there in a separate community, and vestiges of the Shang population were still to be found there in the fifth century A.D.:  they were entirely impoverished potters, still making vessels in the old style.