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Archaeological research has by now revealed a great deal of variation in the way early complex societies, or chiefdoms, developed. This variation is widely recognized, but our understanding of the forces that produced it remains relatively undeveloped. This paper takes aim at such understanding by exploring variation in the local economies of six early chiefdoms; it considers what implications this variation had for trajectories of chiefdom development, as well as the source of that variation. Economic exchange is a primary form of local interaction in all societies. Because of distance-interaction principles, closer household spacing within local communities facilitated more frequent interaction and thus encouraged productive differentiation, economic interdependence, and the development of well-integrated local economies. Well-integrated local economies, in turn, provided ready opportunities for aspiring leaders to accumulate wealth and fund political economies, and pursuit of these opportunities led to societies with leaders whose power had a direct economic base. Wider household spacing, on the other hand, impeded interaction and the development of well-integrated local economies. In such contexts, aspiring leaders were able to turn to ritual and religion as a base of social power. Even when well-integrated local economies offered opportunities for wealth accumulation and a ready source of funding for political economies, these opportunities were not always taken advantage of. That variation in the shapes of early chiefdoms can be traced back to patterns of household spacing highlights the importance of settlement and interaction in explaining not just chiefdom development, but societal change more generally.