Complex sentence: Meanwhile, Palpatine appoints Anakin as his personal representative on the Jedi Council, but the Council declines Anakin the rank of Jedi Master and orders him to spy on Palpatine, which diminishes Anakin's faith in the Jedi.
Split into simpler sentences: Meanwhile, Palpatine appoints Anakin as his personal representative on the Jedi Council. While they allow him a seat, the Council refuses to grant Anakin the rank of Jedi Master, and instruct him to spy on Palpatine, which diminishes Anakin's faith in the Jedi.