Forest policy in India has acknowledged the rights of local users since the nineteenth century. This paper documented the development of formal and informal rights over forest resources in two districts of Himachal Pradesh. The strong rights of individuals meant that social forestry projects of the 1980s and 1990s had little impact. However, when forest users were faced with encroachment by outsiders, they came together of their own initiative to form institutions capable of protecting their collective rights. Citing case studies to illustrate four different types of village-level institutions, the author demonstrated how a common need can stimulate collective action in spite of social heterogeneity and a tradition of individual rights.