Drawing on theories of historical sociology, we model the emergence of the territorial state in early modern Europe. Our modeling effort focuses on systems change with respect to the shift from indirect to direct rule. We first introduce a one-dimensional model that captures the tradeoff between organizational and geographic distances. In a second step, we present an agent-based model that features states with a varying number of organizational levels. This model explicitly represents causal mechanisms of conquest and internal state-building through organizational bypass processes. The computational findings confirm our hypothesis that technological change is sufficient to trigger the emergence of modern, direct state hierarchies. Our theoretical findings indicate that the historical transformation from indirect to direct rule presupposes a logistical, rather than the commonly assumed exponential, form of the loss-of-strength gradient.