The purpose of this research is to study the development of Tai States especially Tai Yuan in Northern Thailand, Tai Lue in Sipsong Panna, People’s Republic of China and Black Tai in Lunag Namtha, Lao People’s Democratic Republic. In Lanna, Sipsong Panna and Sipsong Chutai, from communities based on kinship and beliefs in spirits to urbanization which integrates Buddhism and original beliefs, both the beliefs and Buddhism supported rulers as mediums between the spirits and the people and as means to control manpower in both villages and cities. On the other hand, Buddhism used to strengthen the rulers’ power and control their behaviour. It is also a structure which controls the societies ruled by a senior member in the family and leads to a feudal system. Ruled by Chao Muang and Chao Phaendin, Lanna developed a structure for its state to be governed by autocratic kings, whereas, Sipsong Chutai and Sipsong Panna was governed by a federal system: the ruler is acknowledged by other rulers, but they are still autonomous. This is decentralization.