To keep the British at bay and to enlist their support against the Moghuls, the Marathas, who had founded their own empire/kingdom made friends with the Portuguese and signed with them a treaty in 1779. Underthis, the Maratha-Peshwa agreed that the Portuguese would be allowed to collect revenues from Dadra andNagar Haveli which consisted of 72 villages (thenknown as parganas, now referred to as district places).Itwas annexed by India from Portugal on 2 August 1954.The people of the territory established free administrationof Dadra and Nagar Haveli, which was finallymerged into the Union of India in 1961