Beginning in the districts of Nalgonda and Warangal, the rebellion evolved into a revolution across Telangana in response to continued repression by the Nizam Mir Osman Ali Khan and later Kasim Razvi.

The rebels established a parallel system of government composed of gram rajyams (village communes) that caused a social revolution where caste and gender distinctions were reduced; women's workforce participation including in the armed squads increased and the conditions of the peasants significantly improved with land redistribution.

[11][12] The tribals such as Chenchus, Koyas, Lambadis, Konda Reddis, and untouchables like the Malas and Madigas were among the most impoverished and particularly vulnerable to severe forms of exploitation by durras, including agricultural slavery.

[5] The peasants were largely dependent on affluent urban interests, mostly composed of Marwadis, Komtis, Brahmins and upper caste Muslims, who controlled the centralised markets in Telangana.

[14] The first incursion of the communist movement in Telangana occurred in the Madhira–Khammam area of Warangal district, through peasants who had settled down at the Wyra and Paleru irrigation projects, and had relatives in Coastal Andhra.

The nationalist, progressive and secular intelligentsia in the city of Hyderabad turned towards political radicalism as well, through the influential Naya Adab (New Salute) which promoted communism in literature,[note 5] and through the Comrades Association initially formed in reaction to the growth of communal sectarian organisations.

It recruited students from colleges[14] but was controlled by a conservative liberal and moderate leadership over whom the Hindu durra aristocracy had a strong influence and who advocated restraint, opposing activities against the "law and order" of the state.

[note 7][18] Convinced that the expulsion of the Nizam along with all the elites was a necessity for effective democratic gains,[19] the left-wing faction decided to fight the feudal system, began embracing communism and started building up the organisation in the villages from 1941 onwards.

[14][20] The moderates expecting a rout, had resigned from their offices, boycotted the election and later formed a marginal splinter organisation, giving the communists free rein over the primary AMS.

[14][20] The agitations were non-violent and employed tactics such as non-cooperation, withdrawal of services and refusal to pay technically illegal taxes, usually demanding the implementation of existent laws which were unenforced.

[23] Hyderabad State passed a legislation for minimum tenurial security in 1945, which only worsened conditions as landlords resorted to frequent mass evictions to prevent accrual of tenancy rights.

[note 8] The influence of the communists in Nalgonda and Warangal districts had become so strong by early 1946 that the administration, including the Nizam's firmans (writs), was unable to function in large areas.

[note 9] The first militant action occurred with a few instances of land seizures from the estates of durras in response to eviction of Lambadi tenant cultivators for non-compliance with additional taxation and demands of vetti forced labour.

The village level communist sanghams (organisations) during the 1944–46 agitations had laid down demands for better wages, disallowance of vetti and baghela slavery, evictions, exorbitant taxation and refusal of a new mandatory post–war grain levy.

[25] One major incident on 4 July 1946 marked the beginning of the rebellion; a procession of over 1,000 peasants was fired at by the men of Vishnur Deshmukh in Kadavendi village of Warangal district,[note 10] Doddi Komarayya who was the leader of the local sangham was killed and a number of others severely wounded.

[note 11] In August 1946, the press wing of the Communist Party of India announced that the villages were under the control of the peasants and launched a national campaign to rally support for the rebellion, publicising the demands of the peasantry and highlighting the feudal exploitation and brutality.

[28] Unable to control the villages, the durras started fleeing to safer regions, resorted to litigation, and relied on the state police and their private militias to suppress the rebellious peasants.

While the left-wing members of the Andhra Conference had gravitated to the Communist Party, those in Maharashtra Parishad in the Marathawada region of Hyderabad State had aligned themselves with the Congress Socialist Caucus, influenced by their presence in Bombay Presidency.

The moderate–left divide persisted with the moderates, mostly affluent lawyers with durra backing, refusing to budge and eventually reaching a crisis point over their position with respect to the communists following the Nizam government's military crackdown on the peasants in late 1946.

[32] Wilfrid Vernon Grigson, Revenue and Police Minister for the Viceroy's Executive Council, conducted his own investigation in December and reported that the peasants had legitimate grievances and that it was not communist propaganda as previously assumed.

[23] The AISPC passed a resolution on 27 December condemning the activities of both the government and the communists, based on a report from their president, Dwarkanath Kachru, who had arrived in Hyderabad to conduct his own investigation.

In a private letter, Kachru wrote to Tirtha that despite their official stance, the grievances of the peasants were genuine such that "no organisation worthy of its name could put up with" and admitted the communists had simply outflanked them through their mass mobilisation.

One major incident occurred in Warangal district where a crowd of 2,000 armed with spears and lathis stormed a police station and released two Congress workers who were being subjected to torture, in the process killing an inspector and injuring several policemen.

[37] In Nalgonda, the epicenter of the rebellion, the communists toured across the district, releasing and redistributing grains hoarded in markets and storages, burning down checkpoints on the border and the records of officials and sahukars in the villages, while raising Indian flags in those locations.

The leadership of the Ittehad had by then passed to Kasim Razvi, a small-time lawyer from northern India who had supported the Pakistan movement and wanted Hyderabad to become a refuge for Muslims in the south.

On 26–27 February, the rebels conducted a major operation with twenty simultaneous co-ordinated attacks on infrastructure targets including important telecommunication facilities, bridges and sections of railway tracks which paralysed the transportation and communication capabilities of the government forces from thereon.

[62][70] The urban population, unaware of the events in the countryside, had supported the intervention and were convinced by the government and with the help of various statements made by revolutionaries against the Congress, that they were indulging in an unnecessary peasants' partisan warfare after the annexation.

The government adopted the strategy of the Briggs Plan in response; tribal communities were evacuated en masse and placed in large detention camps but guerrillas with widespread support from the locals continued to be able to operate and remain supplied.

[67] The guerrillas, who maintained a sophisticated courier system for communications and had made enormous sacrifices for the rebellion, were eventually convinced by the party to accept the continuation of armed struggle was a mistake.

[80] The party attempted to negotiate with the Congress to retain some of the gains made by the peasantry by sending a three-man team to Hyderabad and in anticipation of taking the electoral route in the 1951–52 elections, the first ones to be held in independent India and with universal adult franchise.