I do not want to go into the specifics of the violence. In spite of all that we see on TV and media, the violence is only existing in some corner (not even 1% of the current city) of Hyderabad. They allowed to do around the most well know areas of Hyderabad. I will not read too much. The government is in control and they have the taps and they open them as they need/want.
Coming back to politics, the politics of attrition are being played at this time. Here are the scenarios going on.
Background - Congress party has effectively lost the AP. Whether it is split or not they will not win it. Period. Hence the scenarios are all to make sure there is return of INC.
(1) Declare T council formation with a sunset clause of 10 years and if the things does not improve seperate the state out. TRS will not be happy about it nor the T population in general. Even in this scenario, INC want TRS to merge. Some mollycoddling is going on. That is the reason to allow the agitations. The government has the wherewittal to supress the agitations and movements in a way no one in the world will know there exists T agitation. Media and everything is under INC control. Do not assume some great stuff is happening just because you see something in media

(2) Declare immediate formation of T under the condition that TRS merges with INC at the same time of T declaration. This is also a serious consideration as their modeling is resulting in complete washout of INC in the non-T areas. The merger of TRS with INC will give them Telangana. No coalition only merger. This is the reason ofr KCR being very quite since his LS bluster last week. He is not part of the million march that happened yesterday. They have to calculate immediate loss of about 20 LS and 5 or 6 RS INC seats. In addition they have to get is passed through cabinet. It will be the first time that a state creation will be forced without a consensus. Though this is serious, I am not sure how they will be successful.