This chapter analyzes the position of the two leading nationalist parties—the Indian National Congress and the Muslim League—toward the princely states and how the parties engaged with them through the 1930s and early 1940s, including Congress’ engagement with the increasing political activism of the states’ subjects and the Muslim League’s more hands-off approach. The chapter analyzes how the nationalist movement’s attitude to the princely states transitioned over time—from seeing the princely states as an example of indigenous capacity to rule, to pragmatic disengagement, to outright hostility and increased activism to challenge the princes’ rule, including increased engagement with political groups representing the states’ subjects as they became more and more active in challenging the princes’ autocracy. The princes’ antagonistic position toward the nationalist movement, dominated by the Indian National Congress, and its vision of Indian nationalism also demonstrated their resistance to any internal political reforms that would increase their subjects’ civil and political rights. The princes feared that this path could lead to the implementation of democratic government within their states, which would undermine their sovereignty and further degrade their status and privileges. Many of the reforms the princes did implement in the face of growing political agitation from among their subjects were criticized as mere eyewash, with Congress growing increasingly active in their political activities against princely rule in the late 1930s and 1940s.