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This paper explores the question of extended urbanization by arguing for the need to overcome dualistic views to properly address the political specificities of urbanization in China. To this end, this paper understands state-territorial relations as a process of étatization by drawing on the particular literature on the role of the party-state in urbanization. Through a brief history of Guangdong, it elaborates on the political modalities of territorialization through China's administrative rank system. This has enabled the party-state to mediate the production of urban space. From this, I arrive at the concept of "territorially-nested urbanization", moving beyond limited accounts of hierarchical state powers in Chinese urban studies. Next, from a short periodization of Dongguan's urbanization, the paper exemplifies how a particular mode of territorialization has evolved into tense relationships between the city and towns in the ongoing dilemma of multi-centered versus concentrated direction of urbanization. Based on insights from in-depth fieldwork, the last part of this paper illustrates the contradictory mobilization of village collectives within extended state power through local government, and the development of villagers' politics and activism in contested land transformations. [ABSTRACT FROM AUTHOR]