AbstractThis article explores the experience of one village in Ethiopia since the overthrow of the Marxist‐Leninist Derg regime in 1991. The new government introduced policies that have much in common with those dominating the international geopolitical scene in the 1990s and 2000s. These include an emphasis on democracy, grassroots participation and, to some extent, market liberalization. I report here on the manifestations of these policy shifts in Gamole village, in the district of Konso, once remote from the political centre in Addis Ababa but now expressing its identity through new federal political structures. Traditional power relations between traders and farmers in Gamole have been transformed since 1991 as the traders have exploited opportunities to extend trade links, obtain land and build regional alliances through participation in the Ethiopian Orthodox Church. They have appropriated the discourse of democracy to challenge their traditional position of subordination to the farmers – and this, in turn, has led to conflict. While these changes reflect the postsocialist transition, they can also be seen as part of a continuing process of change brought about by policies of reform in land tenure, the church and the state, introduced during the Derg period. These observations at a local level in Ethiopia provide insights into the experiences of other states in postsocialist transition.