This paper set out to confer an argumentative essay on the contemporary challenges of politicized statehood narratives and identity politics in Ethiopia. In doing this my argument is mainly supplemented with secondary source of data. Accordingly, books, articles, and different published materials were critically reviewed. Based on a critical review of the existing literatures I argued that with the coming of ethnic identity as the mainstay of Ethiopian politics,displacements of civilians, ethno-centric-prejudice, inter-ethnic mistrust, and a sense of insecurity especially by non-ethnic residents of given places has been increased.Along with this, ethno-centric fundamentalist elites disseminates politicized statehood narratives that intends to depict ‘past historical injustice’ as being committed by the ‘Amhara ruling-class’ against all other ethnic group of the nation. Therefore, in my point of view the increasing number in the displacements of civilians, ethno-centric-prejudice, inter-ethnic mistrust, and a sense of insecurity especially by non-ethnic residents of given places in Ethiopia are looked to be directly or indirectly rooted from elites fabricated and politicized statehood narratives and identity politics. Hence, this condition is not alleviated soon it may lead the nation to path of fragmentation.To this end, in this paper I suggest that before going to take any measures to control and manage the country from being fragmented, we should first create national consensus based at forgiveness regarding what was happened in the past. Then we should clearly know the deep rooted nature and challenges of applying identity politics in the federal state of Ethiopia and must come up with sound systems that can promote sense of Nationalism in the first place. Keywords: Identity Politics, Politicized Statehood Narratives, Ethno-centrism, Nationalism, and Nation Fragmentation. DOI: 10.7176/IAGS/87-01 Publication date: October 31 st 2020