In the encomienda, the Spanish Crown granted a person a specified number of natives from a specific community but did not dictate which individuals in the community would have to provide their labor. ... In many cases natives were forced to do hard labor and subjected to extreme punishment and death if they resisted.
It created a class system in which natives were considered inferior to Europeans. It led to the deaths of more natives in worker revolts and during migrations. It meant that native farmers could only raise crops for food, not for cash.
The encomienda system allowed for a vast accumulation of wealth by the conquistadors and the Spanish crown. They benefited from the discovery of gold and silver in the New World, and the mining of those metals by their laborers.
The encomienda system (in theory) was a feudal-like system where Spaniards would offer protection and education to the native populations in exchange for labor and money/gifts. In reality, the encomienda system was a horrible abuse of power and essentially slavery.
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-Astolfo
