Ethnicity and Ethnic Politics is an important Phenomenon of Plural Societies. In developing world, ethnic politics is one of the main reasons of internal instability. Ethnic conflict leads towards ethnic politics which is often conceived as a conflict among ethnic groups. This study has focused on the theoretical frame work of ethnic politics, and the main argument is that state has a central role in developing, escalating and diffusing ethnic conflict that is why ethnic conflict does not only mean conflict among ethnic groups but group’s conflict with state is also the part of ethnic politics. The study highlights various steps towards the development of politics of ethnicity. A life cycle model of ethnic conflict is also drawn to analyze various stages of conflict, and how the intensity of ethnic conflict with state gradually gain momentum. The debate also focuses that ethnic conflict with state should be handled on priority basis. If state fails to resolve conflict, the reformation of nationality of a particular ethnic group creates serious unrest and threat to the process of nation building.