Eastern Indonesia has been a region of international interest since its identification as a source of spices and rare woods. This paper considers ideas of sovereignty held by both Portuguese and Dutch at the time of European contact. It traces the consequence of the application of these ideas to the development of forms of governance in eastern Indonesia: in particular, the concept of indirect rule that began with contracts of trade fostered by the Dutch East India Company. Such contacts with local rulers or community representatives provided the basis for later colonial rule and contributed to specific social identities that remain prominent to the present. These historically established social identities continue to underpin various efforts at establishing local autonomy.