After the Battle of Sekigahara the newly formed Tokugawa bakufu divided Japanese lords into three categories: the shinpan daimyo were those directly related to the Tokugawa house, the fudai daimyo were those that sided with Ieyasu at Sekigahara, and the tozama daimyo were those that sided against Ieyasu and only later submitted to his authority.
The lands of these tozama daimyo are known as the tozama domains, literally "outsider" domains.
The tozama domains arose because, despite the unquestioned superiority of the Tokugawa and their allies, there were limits to Tokugawa power. While the bakufu simply confiscated the enemy domains that were close to the capital of Edo, enemy domains at the fringes of the empire - those on Kyushu and far western Honshu - could not easily be conquered and confiscated, and thus an uneasy alliance was deemed the best option.
These tozama daimyo nominally recognized the supremacy of the Tokugawa in order to keep their lands, but in reality governed their lands as independent kingdoms. The bakufu always viewed them as a potential threat, so they were excluded from the Tokugawa power structure, subjected to rigid controls, a system of spying, and a ban from holding high office.
These measures were intended to keep the tozama domains weak, but in reality had the opposite effect. While the loyal domains increasingly lost their individual identities and thus their ability to act as buffers agains tozama agression, the tozama domains developed increasing autonomy and became hotbeds for anti-bakufu plotting. Thus, it was three of the old tozama domains - Satsuma, Choshu, and Tosa - that eventually united to overthrow the Tokugawa bakufu in 1867.