In the north of India, at the westernmost point of the Himalayas, lies the former princely state of Kashmir, a region of rugged mountain ranges and valleys over which Pakistan and India have been in conflict for more than 70 years.

It is now one of the world's most heavily militarised regions. And things have just heated up considerably.

On August 5, the Indian government announced it was revoking the special constitutional status of the part of Kashmir that's ruled by India, the state of Jammu and Kashmir. It may sound like a technicality, but it's much more: the move may represent the biggest geopolitical shift yet in Kashmir's chequered history.

In anticipation of a mixed response, thousands of Indian troops poured into Indian-controlled Kashmir ahead of the announcement. Some of its political leaders are under house arrest. More than 500 people have been detained in night-time raids. Public assemblies have been banned and tourists expelled. The internet and phones have been blocked.

Pakistan is outraged. Pakistanis burned effigies of Indian Prime Minister Narendra Modi in the streets. His Pakistani counterpart, Imran Khan, spoke of "fighting to the last drop of blood" if the situation escalated. China, which also has a stake in Kashmir, opposed India's move; India rebuked China for meddling in its affairs. The United States, meanwhile, called for "direct dialogue" between India and Pakistan.

How did they get to this point? What does it mean? What will happen next?

Why is Kashmir such a hotspot?

The dispute over Kashmir started in 1947, when the British Raj, or Crown rule of India, was dissolved and its territory partitioned into two countries: Pakistan and India. Pakistan covered those areas where most people were Muslim; India the areas that were mainly Hindu.

But the British could not carve up the hundreds of princely states in the region because they had never had formal control of them. To sort this out, India had already created an Instrument of Accession that allowed princes to hand over control to the Indian government. By 1947, most of them had signed on the dotted line.

Not Kashmir. While most people who lived there were Muslim, their ruler, Maharaja Hari Singh, was Hindu. During partition, he acceded to neither Pakistan nor India, arguing that an Indian-controlled Kashmir would leave the Muslim majority unhappy while a Pakistan-controlled Kashmir would leave Kashmir's Sikh, Hindu and Buddhist minorities vulnerable.

(One princely state in southern India, Hyderabad, was a mirror image of Kashmir: a Hindu-majority state ruled by a Muslim prince, the Nizam. After it refused to sign an Instrument of Accession, India invaded and conquered it in 1948, in what was known as Operation Polo.)

Within weeks of partition, as Kashmir's future hung in the balance, Pakistan launched an offensive to try to take control of it. The Maharaja asked India for help but there was a catch – he had to sign over control to India. The first Indo-Pakistan war ensued until the opposing forces faced off on what is now known as the Line of Control, and a ceasefire was called on the last day of 1948.

The upshot was that Pakistan ended up with control of about a third of Kashmir while India controlled the rest, including the Kashmir Valley, Jammu and Ladakh. India's part of Kashmir is the only state in the nation that has a majority Muslim population.

This is the root of today's conflict: as a long-standing democracy, India sees itself as better placed to guarantee the rights of multiple communities, while Pakistan sees Indian rule of Kashmir as a violation of the principle of self-determination along religious lines that underpinned the 1947 partition. The United Nations called for withdrawal of both militaries and a plebiscite of Kashmir's population, but found the warring parties could not agree terms of withdrawal.

Indian troops have since had a presence in Kashmir and throughout that time they have been accused of severe human rights abuses. The Indian government points to the threat of terrorism from militant movements in Kashmir, many of them aided and even sponsored by the Pakistani military.

Relations between the nations have been particularly strained since February, when a suicide bombing in Kashmir killed 40 Indian paramilitary troops. An exchange of airstrikes included a dogfight that led to an Indian fighter pilot being shot down and taken prisoner by Pakistan, before he was returned.

The other country that has a direct interest in the region, although not implicated in the current troubles, is China. It controls part of the Kashmir region called Aksai Chin, which provides it with a strategic link between Xinjiang (home of the Muslim Turkic-speaking Uighurs) and Tibet.

When China started building a road through this territory, it sparked war with India in 1962, which led to the creation of a Line of Actual Control. Both India and China still claim chunks of each other's territory along their 3500-kilometre Himalayan border. Pakistan, for its part, ceded a part of the region to China in 1963. China's interest in the region is behind its statements of alarm over this current situation.

What did the government do to change Kashmir's special status?

Article 370 of India's constitution gave Kashmiris a separate constitution. The state of Jammu and Kashmir could set its own laws, except for those related to defence, foreign policy and communications. The government in New Delhi revoked this article.

Included in Article 370  was another key law: article 35A, which had allowed Jammu and Kashmir's legislature to define who were considered permanent residents of the region. Also called the Permanent Residents Law, it forbade Indians from outside the state from permanently settling, buying land, holding local government jobs or winning education scholarships in the region.

Article 35A also barred female residents of Jammu and Kashmir and their children from having property rights if they married a person from outside the state. In other words, a commitment had been made to protect the demographic mix of Kashmir from an influx of outsiders or, more pointedly, from complete "Indianisation".

In addition to revoking these articles, the Indian government also announced it would split the state of Jammu and Kashmir into two union territories (territories which, unlike the states, are governed federally): a new smaller Jammu and Kashmir, which will have a legislature, and Ladakh, which will be ruled by Delhi without a legislature of its own.

What did Modi say?

In an address to the nation on August 8, Modi said the "mainstreaming" of the Kashmiri people would expedite development and create jobs. He accused Pakistan of using the past arrangement "as a weapon to incite people of the region against India" and said the new system would free Kashmir from terrorism and separatism.

"Some people are in favour of this decision and some will have a different opinion," he said.

He also rejected criticism that the new assembly would have little power. A lieutenant governor appointed by New Delhi will oversee the region's governance. "Your representative will be chosen only by you," he said. "I assure you that you will get an opportunity to elect your representatives very soon with full transparency."

What was the response?

While the announcement was sudden, it was not entirely a surprise.  Modi is a member of the Hindu-nationalist Bharatiya Janata Party (BJP), which increased an already substantial majority in the country's Parliament in elections this year. The decision on Kashmir fulfilled a campaign promise made to the BJP's Hindu base, who oppose special treatment for the region.

Critics say the government hopes to change Jammu and Kashmir's Muslim-majority demographics by allowing in a flood of new Hindu residents, while Hindu Kashmiri families who fled the region during an outburst of communal violence in 1989-90, and who now number as many as 500,000, will hope to return home.

Pakistani Prime Minister Imran Khan announced on August 7 a series of measures to oppose what he called "unilateral and illegal actions" by India. He also said Pakistan would take the matter to the UN Security Council and ensure the army remains vigilant.

Bilateral trade between the two countries amounts to about 3 per cent of Pakistan's total trade and about 0.3 per cent of India's.

"Despite its bluster, Islamabad has limited true retaliatory options," Michael Kugelman, deputy director of the Asia Program at the Washington-based Wilson Centre, told Bloomberg. "There's no way it can get India's decision to be reversed, and it's not about to send troops into Kashmir, and so naturally it will take the few risk-free punitive steps at its disposal."

In Srinagar, Kashmir's biggest city, the few people who were able to transmit messages said they were terrified, reported The New York Times. Amid a city-wide shutdown, Indian soldiers were patrolling barricaded intersections and curfew passes were required.

Protests flared on the streets. One witness said: "I saw around 100 boys, in small groups, pelting stones. The police fired tear gas to beat them back."

In Ladakh, the move was welcomed by the largely Buddhist population, glad to be distanced from Jammu and Kashmir and all the tourist-repelling trouble that comes with it. Placing the central Indian government more in control may also help counter growing Chinese influence in Ladakh, said Sameer Patil, a Mumbai-based fellow at the Gateway House think tank. (China and India had a two-month standoff on Ladakh's Doklam plateau in 2017.)

But in another part of Ladakh, the border city of Kargil, there were protests because its Muslim majority identifies culturally with Kashmir.

What did Pakistan say?

"If India attacks us, we will respond," Imran Khan told Parliment. "We will fight until the last drop of blood."

Pakistan's foreign ministry also says India's actions violate the UN resolutions adopted after the first Indo-Pakistan war that allowed for Kashmiri self-determination. Pakistani officials say India is trying to void that right.

What did China say?

China is "seriously concerned" about the situation, foreign ministry spokeswoman Hua Chunying has said. "India's unilateral amendment to its domestic law continues to damage China's territorial sovereignty. This is unacceptable.

"The relevant sides need to exercise restraint and act prudently. In particular, they should refrain from taking actions that will unilaterally change the status quo and escalate tensions."

What happens now?

US President Donald Trump has offered to mediate between India and Pakistan on the issue. While Pakistan has welcomed the offer, India has repeatedly rejected it, saying the dispute is between the two countries.

Their differences over the changes are likely to be fought through diplomacy, with both states unlikely to breach the crucial bilateral non-nuclear aggression agreement, India's former high commissioner to Pakistan, Gopalaswami Parthasarathy, told Bloomberg.

"The Pakistani army is adventurous, not suicidal," he said. "The bilateral nuclear agreement remained in place through tougher periods … In this case, they will at best go up to the United Nations Security Council."

– With New York Times, Bloomberg and agencies