Was Kashmir a princely state?

Yes, Kashmir was a princely state under the name Princely State of Kashmir and Jammu. It was created in the aftermath of the First Anglo-Sikh War, from the territories that had earlier been in Sikh Empire.

Kashmir was a focal point of the first Indo-Pak war of 1948. The dispute over its ultimate fate – Whether it should join India or Pakistan or remain an independent entity – has been a root cause of animosity between India and Pakistan ever since.

For further reading check the following articles:

• Portuguese India
• British Raj
• Dutch Colonialism in India