This article studies the legacy of local dynamics of the War of Independence in local state building in Mexico. The analysis shows that municipalities where local militias were organized have a higher number of public servants and a larger budget per capita in the early 1900s than municipalities with an insurgent legacy, relative to those with no conflict. The results hold when restricting the sample to neighbors and controlling for geographic and economic factors. Historical evidence supports existing theories of intra-elite conflict while highlighting the role of local fiscal councils in municipalities with a legacy of local militias. Decentralization during and after the war strengthened local elites, while the negotiated war termination added a political-elite layer of insurgent leaders, born in conflict with colonial-era economic elites. These findings suggest that the local dynamics of civil warfare can have long-lasting effects on state building, boosting local state capacity in some regions and not in others.