Internal colonialism is the uneven effects of economic development on a regional basis, otherwise known as "uneven development", as a result of the exploitation of minority groups within a wider society which leads to political and economic inequalities between regions within a state. This is held to be similar to the relationship between a metropole and a colony, in colonialism proper. The phenomenon leads to the distinct separation of the dominant core from the periphery in an empire.

Robert Blauner is regarded as the developer of the theory of internal colonialism. The term was coined to highlight the "blurred" lines between geographically close locations that are clearly different in terms of culture. Some other factors that separate the core from the periphery are language, religion, physical appearance, types and levels of technology, and sexual behavior. The cultural and integrative nature of internal colonialism is understood as a project of modernity and it has been explored by Robert Peckham in relation to the formation of a national modern Greek culture during the nineteenth century, when Greece gained its independence from the Ottoman Empire.

The main difference between neocolonialism and internal colonialism is the source of the exploitation. In the former, the control comes from outside the nation-state, while in the latter it comes from within.

The first known use of the concept of internal colonialism was by Marquard (1957) regarding South Africa. However, the concept became popularized following the publication of an article on Mexico by Gonzalez Casanova (1965). Gonzalez Casanova was both critiqued by, and influenced Andre Gunder Frank, who further theorised internal colonialism as a form of "uneven development". Sergio Salvi [it], a poet, essayist, and historian of minority languages, used the term "internal colonies" in the cultural sense in Le nazioni proibite: Guida a dieci colonie interne dell'Europa occidentale ("The forbidden nations: Guide to ten internal colonies of western Europe") (1973), among which he included Catalonia, Scotland, Brittany and Occitania. Other pivotal works on the subject were published during the mid-1970s by Harold Wolpe and Michael Hechter.

A common topic amongst postcolonial writers was their description of feelings, such as schizophrenia, being torn between local tradition and global modernity.

Afghanistan is an example of internal colonialism affecting state-building, as Nazif Shahrani argues "the incessantly centralizing state policies and practices of internal colonialism, generally aided and abetted by old colonialist powers... produced a cumulatively negative impact on state-building efforts in Afghanistan." The international security scholar, Dipali Mukhopadhyay, considers the presence of warlordism in the Afghan periphery to be a concern for the development of the political economy, with the 2007 World Bank Report highlighting weak institutional links between provincial offices and relationships with the central government poorly defined.

One of the exceptions of internal colonialism as the subsistence of 'blurred lines' between the core and periphery is French Algeria. There were clearly distinct features separating the core from the periphery. "The core was Christian, French-speaking, light-skinned, and comparatively prosperous". The other side was Muslim, Arabic- or Berber-speaking, and significantly poorer. The grey area of French Algeria was the large Jewish population, which did not belong in either the core or periphery in terms of common cultural factors.

Austro-Hungarian Empire exhibited characteristics of internal colonialism, where certain regions and ethnic groups within the empire (like Hungary and Transylvania) were systematically disadvantaged compared to the dominant German-speaking core.