I'd like to know why did Chancellor Palpatine created the Clone Wars?
It doesn't make sense to me that the Chancellor was both head of the Republic and the Sith.
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Per the wookiepedia page on Darth Sidious (AKA Chancellor Palpatine), his
Entire life was the culmination of a thousand-year plan to overthrow the Republic and the Jedi Order from within.
and that he
headed both the Galactic Republic and, secretly, the Confederacy of Independent Systems.
As billions perished in the war, the vast majority of Republic citizens rallied behind Chancellor Palpatine, giving him enough support to amend the Galactic Constitution in the name of security and transfer most of the Senate's executive authority to his own office
Order 66 : Wherein all members of the Jedi Order were accused of treason and betrayed by their clone troopers to the point of virtual extermination.
with the ultimate result being
Without the Jedi to oppose him, Palpatine declared himself Emperor of the first Galactic Empire, bringing an end to the Republic that had stood for over 25,000 years
The whole story was just a political scheme to overthrow Republic and become it's leader (thus leading to a Sith Galactic Empire). Sticking only to movies:
In "The Phantom Menace", Palpatine needed the Federation of Commerce to attack Naboo in order to get a chance to become Chancellor. The whole plot was meant to replace Finis Valorum as a head of Republic;
In "Attack of the Clones", Palpatine use the breakout of the civil war to force the Senate to give him extra-powers (eventually leading to the formation of the Galactic Empire). Without an ongoing war, he would have not been suitable to obtain such powers;
Moreover, as seen in "The Revenge of the Sith", the clone army would have been a decisive pawn in the incoming Jedi purge.
So, from his point of view, reaching the position of Chancellor of the Republic was just the first step to gain absolute dominion as a Sith lord over the galaxy.
he started the clone wars so he would get voted as the Supreme chancellor or leader of the entire Republic, as well as having an army with which answered directly to him so as to keep the galaxy under his control, and to later on kill the jedi. He knew how to multi-task like non other. =)
Another way to explain it even more simply:
No matter which side won the conflict, Separatists or Republic, Palpatine would have come out supreme leader.
Want to see a real world example of playing both sides. Look at the USA foreign policy back in the 1980s. The USA was OPENLY selling arms to Iraq and COVERTLY selling arms to Iran while Iran and Iraq were at war with each other.
Palpatine needed an army to control an empire: He could have used the droids, why not?
Droids are cheap and can be deployed in great numbers, but they are not good at fighting without their numbers, They are designed to overwhelm.
Second, droids were not made for advanced or complex thinking processes, as the separatists feared it would cause rebellion (imagine taking R2-D2's processing unit or OS into a B1 Battle droid - He would refuse to kill civilians or unarmed people, where as a B1 unit cannot not distinguish the difference between someone who is armed and someone who is unarmed unless ordered to do so.)
Palpatine could issue order 66 any time, why so late in the war?
Firstly, he knew the clones would be better fighters. As humans, regardless of the upbringing, they would carry with them creativity and ingenuity, which would give them two advantages droids don't have.
Secondly, he needed the clones to be battle hardened so that they would be trained and ready to fight a war if need be at the republics expense. He is basically getting an army for free here.
Thirdly, think of the vehicles, weapons, armor, and gadgets needed to fight a war. They need to be battle tested. See their weaknesses and strengths - which combinations of vehicles worked the best. Which tactics worked. Which didn't.
I can go on, but you get the idea. In order for the chancellor to ensure he won all future wars, he must first ensure his potential army could win the current one.
Similarly, he also needed Anakin on his side, as well as the right time and reason to eliminate not only the jedi, but the jedi council. The jedi council trying to eliminate him was the perfect excuse.
As you can see, had he not have waited, his empire would have been built on shaky and unsure ground, which would have been pointed out by the general public, who may have taken the advantage of the situation, and attempted to overthrow the new government.
Likewise, he would need the senates help to raise his empire, along with the public.
At the stage it was at, where most of the planets knew the republics power because the republic had enough time to get most planets involved in the war the inhabitants of those planets would have known that to rebel against the republic would be a bad mistake.
So through those three years, he would be able to turn the sure knowledge that the republic would always win into fear that they knew the republic would always win - making the option to rebel out of the question.
Again, this is all speculation, however I felt that it should be adequately explained so that you can properly see just how meticulous Palpatine was in planning the whole charade.
I put the chancellor second only to the Joker in my list of favorite villains.