During the reign of Frederick the electors and the greater princes continued the process of consolidating and increasing their power. Lands under their rule, which were technically imperial fiefs, were divided and devised by them at will like other forms of private property; they had nearly all the rights of a sovereign with regard to levying tolls, coining money, administering justice and granting privileges to towns; they were assisted in the work of government by a privy council, while their courts with their numerous officials began to resemble that of the king or emperor. They did not, however, have everything their own way. During this century their power was limited by the formation of diets in many of the principalities. These bodies were composed of the mediate prelates, the mediate nobles and representatives of the mediate cities. They were not summoned because the princes desired their aid, but because arms could only be obtained from the nobles and money from the cities, at least on an adequate scale. Once having been formed these local diets soon extended their functions. They claimed the right of sanctioning taxation; they made their voice heard about the expenditure of public money; they insisted, although perhaps not very effectually, on justice being administered. Such institutions as these were clearly of the highest importance, and for two centuries they did something to atone for the lack of a genuine monarchy.
During this reign the conditions of warfare began to change. The discovery of gunpowder made small bodies of men, adequately armed, more than a match for great forces equipped in medieval fashion. Hence the custom of hiring mercenary troops was introduced, and a prince could never be certain, however numerous his vassals might be, that the advantage would not rest with his opponent. This fact, added to the influence of the local diets, made even the princes weary of war, and a universal and continuous demand arose for some reform of the machinery of government. Partly at the instance of the emperor a great Swabian confederation was formed in 1488. This consisted of both princes and cities and was intended to enforce the public peace in the south-western parts of Germany. Its effects were excellent; but obviously no partial remedy was sufficient. It was essential that there should be some great reform which would affect every part of the kingdom, and for the present this was not to be secured.