A principality can either be a monarchical feudatory or a sovereign state, ruled or reigned over by a regnant-monarch with the title of prince and/or princess, or by a monarch with another title considered to fall under the generic meaning of the term prince.

A monarch is a head of state for life or until abdication, and therefore the head of state of a monarchy. A monarch may exercise the highest authority and power in the state, or others may wield that power on behalf of the monarch. Usually a monarch either personally inherits the lawful right to exercise the state's sovereign rights or is selected by an established process from a family or cohort eligible to provide the nation's monarch. Alternatively, an individual may proclaim oneself monarch, which may be backed and legitimated through acclamation, right of conquest or a combination of means.