This paper proposes an understanding of political violence in a major metropolis through the lens of informality in urban planning and land use. Political conflict in Karachi has been examined largely from the lens of ethnic identity. Here it is shown, using census data, how urban planning was implicated in the evolution of the city’s ethnic demography. Election results at the polling station level further confirm the importance of territory in Karachi’s violent political divisions. The literature on informal economic governance, and its insights on non-state contract enforcement and dispute resolution, is used to interpret case studies of three unplanned neighbourhoods. Various migrant cohorts had distinct experiences regarding informal economic governance and the politics of regularisation. These differences gave rise to two alternate modes of informal economic governance, which not only sustained violent political divisions, but also denied coercive monopoly to formal institutions of the state.