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Towards the end of the 19th century, the balance of military power shifted towards the industrialising Dutch and against pre-industrial independent indigenous Indonesian polities as the technology gap widened.

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During the 19th century, Dutch possessions and hegemony were expanded, reaching their greatest territorial extent in the early 20th century.

This colony was one of the most valuable European colonies under the Dutch Empire's rule, The term Indonesia came into use for the geographical location after 1880.

Southwestern Sulawesi was occupied in 1905–06, the island of Bali was subjugated with military conquests in 19, as were the remaining independent kingdoms in Maluku, Sumatra, Kalimantan, and Nusa Tenggara.

Other rulers including the Sultans of Tidore in Maluku, Pontianak (Kalimantan), and Palembang in Sumatra, requested Dutch protection from independent neighbours thereby avoiding Dutch military conquest and were able to negotiate better conditions under colonial rule. On 27 September 1940, Germany, Hungary, Italy, and Japan signed a treaty lining out "spheres of influence". The Netherlands, Britain and the United States tried to defend the colony from the Japanese forces as they moved south in late 1941 in search of Dutch oil.

Graaf van den Bosch's Governor-generalship (1830–1835) confirmed profitability as the foundation of official policy, restricting its attention to Java, Sumatra and Bangka.

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