We have earlier argued (Gupta 1990) that portfolio of activities evolved by households for adjusting with risks includes a combination of apparently rational and not so rational strategies of livelihood. The portfolio is based on resources governed by different property right regimes on one hand and ethical and cultural norms on the other. In this paper I argue that institutions for natural resource management are a part of evolutionary cultural, religious and social experience of any community. While it is inevitable that conflicts in the access to resources or their utilization emerge from time to time. These conflicts need not erode completely the network of common property knowledge systems. The conflicts and convergence may simultaneously take place along different planes and levels of consciousness. One cannot analyze resource management institutions without understanding the conceptualization of nature and repertoire of responses that a community evolves to adjust with changes in the natural phenomena. The incidence of drought in dry regions, hailstorm or landslides in hill areas, occurrence of plant, animal or human diseases particularly the ones which are contagious (and call for collective quarantine) and any other natural calamity creates stress on the social institutions. Folk literature including riddles, songs, proverbs, adages, stories, theater and jokes provide mechanisms for internalizing certain values which in their explicit form are either difficult to imbibe or to sustain. In our anxiety to look for rules and related order we may miss the creativity that underlies the experimental and innovative mind of peasants and pastoralists in these regions. I present in part one a framework for looking at boundaries of beliefs, eco-sociological context and institutional images for natural resource management. In part two I present instances which illustrate the creative aspect of people's indigenous eco-sociological knowledge systems (IEKS). In part three, I deal with the lessons for institution building requiring incorporation of indigenous knowledge as a building block of modern institutions. Finally issues for further research are identified.