Why do armed groups fighting in civil wars establish different institutions in territories where they operate? This article tests the mechanisms of a theory that posits that different forms of wartime social order are the outcome of a process in which an aspiring ruler—an armed group—expands the scope of its rule as much as possible unless civilians push back. Instead of being always at the mercy of armed actors, civilians arguably have bargaining power if they can credibly threaten combatants with collective resistance. Such resistance, in turn, is a function of the quality of preexisting local institutions. Using a process‐driven natural experiment in three villages in Central Colombia, this article traces the effects of institutional quality on wartime social order.