Georgia is the most democratic country in the Caucasus, but arguably its democratization has also been riddled by Huntingtonian developmental crises, resulting in ethnic conflicts and civil wars. We argue that variation in the type of political instability is best understood by focusing on the interaction between nationalism and political institutionalization rather than on their independent effects. We show that Gamsakhurdia’s “state-breaking nationalism”, coupled with political deinstitutionalization, produced separatist and centrist civil wars. When Saakashvili’s “state-making nationalism” enhanced state capacity, it marginalized the opposition and rekindled frozen separatist conflicts, but stronger administrative institutions enabled the government to avert another revolutionary regime change.