Chapter 2 emphasizes theoretical and methodological issues as they relate to understanding the five social categories. It examines concepts concerning nation-states, minority peoples, and national identity, which were applied in Iran to a secular westernizing state (in the twentieth century to 1979) and then to a fundamentalist Islamic theocracy. Under both periods, state rulers tried to control citizens and enforce policies of Persianization and Shi‘i Islamization. They failed nationwide in these political goals. Many Iranians were not ethnic Persians, not Shi‘i Muslims, and/or not amenable to assimilation and centralization. The chapter expands notions of sectarianism to include non-religious, subnational, politicized mass-groupings. It emphasizes people’s local-level communities as defined by location and livelihood; ethnolinguistic, religious, and tribal affiliation; and family, kinship, and gender. Persian Iranians list certain features as part of Iran’s national identity. Changing socioeconomic systems relate to hierarchies of wealth and power that benefit elites and disadvantage other citizens. The chapter discusses past and present local-level ethnographic studies. Engaged anthropologists include Iranians living in Iran, foreign-residing Iranians who traveled to Iran for research, and foreigners. The chapter discusses difficulties in doing research since the 1978-79 revolution, formation of a repressive theocracy, and Iraq-Iran war.