The Treaty of Tordesillas, signed in 1494, was an agreement between Spain and Portugal that divided the newly discovered lands outside Europe along a meridian 370 leagues west of the Cape Verde islands. This treaty influenced the political organisation of the New World by granting Spain the rights to colonise all lands to the west of this line, while Portugal was entitled to the lands to the east, which included parts of modern-day Brazil. The result was that Spain focused its colonial efforts on Central and South America, developing the viceroyalty system there, while Portugal, once it pushed into Brazil, implemented the captaincy system. These distinct political structures influenced the development of colonial administrations, law, and economy, leading to the different colonial experiences and legacies in Spanish and Portuguese America.

The Council of the Indies, established in 1524, played a fundamental role in the governance of the Spanish American colonies as the most important administrative organ of the Spanish Empire for the Americas and the Philippines. Its role was comprehensive, encompassing the drafting of legislation, the appointment of colonial officials, the administration of justice, and the management of indigenous affairs, military matters, and the church. The Council reviewed and approved all major decisions and laws before they were implemented in the colonies, making it a central hub of colonial governance. It acted as a bridge between the colonies and the Spanish Crown, ensuring that colonial administration aligned with the interests of the monarchy, while also handling appeals from colonial decisions, making it an ultimate court of recourse for colonial subjects.

The captaincy system in Portuguese America underwent significant changes following the Iberian Union (1580-1640), where the crowns of Spain and Portugal were united under the Spanish Habsburg monarchs. During this period, the autonomy of the hereditary captains was reduced as the Spanish Habsburgs sought to bring the Brazilian colonies under closer Crown control. The governance shifted towards a more centralized approach, leading to the establishment of a governor-general in Brazil. The impact of these changes was twofold: it brought greater royal administration to Brazilian territories, thereby enhancing the Crown's oversight, and it diminished the power of individual captains, which reduced the influence of local dynasties and prepared the way for a more unified colonial government under the subsequent Braganza rule.

Audiencias were the principal judicial bodies in the Spanish colonies and played a crucial role in colonial governance. Their main functions included not only serving as appellate courts but also executing legislation, overseeing the administration of justice, and at times, exercising viceregal authority in the absence of the viceroy. As part of their administrative duties, they were responsible for tax collection, public spending, and the regulation of trade. Audiencias frequently interacted with the viceroys, often serving as a check on their power, and with the municipal councils (cabildos), which managed local affairs. Their interaction with various elements of governance made them pivotal in the transmission of royal directives and in the shaping of colonial policy, balancing local concerns with imperial interests.

The social hierarchy in the Spanish colonies was deeply intertwined with the viceroyalty system and mirrored the rigid structure of Spanish society. At the top were the peninsulares, Spaniards born in Spain, who typically held the most important colonial administrative and ecclesiastical positions. Below them were the criollos, Spaniards born in the colonies, who often owned land and held significant economic power but were generally excluded from the highest offices, which led to social tensions. The racial and social caste system was further stratified, with mestizos, mulattoes, indigenous peoples, and enslaved Africans occupying the lower ranks. This social hierarchy reinforced the political organisation by ensuring that power remained in the hands of those loyal to the Crown, though it also sowed the seeds of discord that would later contribute to colonial unrest and the struggle for independence.