Farther away from the towns were the
villages of the "natives", nominally also subjects of the lord. In most
parts of eastern China, these, too, were agriculturists. They
acknowledged their dependence by sending "gifts" to the lord in the
town. Later these gifts became institutionalized and turned into a form
of tax. The lord's serfs, on the other hand, tended to settle near the
fields in villages of their own because, with growing urban population,
the distances from the town to many of the fields became too great. It
was also at this time of new settlements that a more intensive
cultivation with a fallow system began. At latest from the sixth century
B.C. on, the distinctions between both land systems became unclear; and
the pure serf-cultivation, called by the old texts the "well-field
system" because eight cultivating families used one common well,
disappeared in practice.

The actual structure of early Chou administration is difficult to
ascertain. The "Duke of Chou", brother of the first ruler, Wu Wang,
later regent during the minority of Wu Wang's son, and certainly one of
the most influential persons of this time, was the alleged creator of
the book _Chou-li_ which contains a detailed table of the bureaucracy of
the country. However, we know now from inscriptions that the bureaucracy
at the beginning of the Chou period was not much more developed than in
late Shang time. The _Chou-li_ gave an ideal picture of a bureaucratic
state, probably abstracted from actual conditions in feudal states
several centuries later.

The Chou capital, at Sian, was a twin city. In one part lived the
master-race of the Chou with the imperial court, in the other the
subjugated population. At the same time, as previously mentioned, the
Chou built a second capital, Loyang, in the present province of Honan.
Loyang was just in the middle of the new state, and for the purposes of
Heaven-worship it was regarded as the centre of the universe, where it
was essential that the emperor should reside. Loyang was another twin
city: in one part were the rulers' administrative buildings, in the
other the transferred population of the Shang capital, probably artisans
for the most part. The valuable artisans seem all to have been taken
over from the Shang, for the bronze vessels of the early Chou age are
virtually identical with those of the Shang age. The shapes of the
houses also remained unaltered, and probably also the clothing, though
the Cho