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Locke defines the state of nature as:

To properly understand political power and trace its origins, we must consider the state that all people are in naturally. That is a state of perfect freedom of acting and disposing of their own possessions and persons as they think fit within the bounds of the law of nature. People in this state do not have to ask permission to act or depend on the will of others to arrange matters on their behalf. The natural state is also one of equality in which all power and jurisdiction is reciprocal and no one has more than another. It is evident that all human beings – as creatures belonging to the same species and rank and born indiscriminately with all the same natural advantages and faculties – are equal amongst themselves. They have no relationship of subordination or subjection unless God (the lord and master of them all) had clearly set one person above another and conferred on him an undoubted right to dominion and sovereignty.

In contrast to Hobbes, who posited the state of nature as a hypothetical possibility, Locke takes great pains to show that such a state did indeed exist. Actually, it still exists in the area of international relations where there is not and is never likely to be any legitimate overarching government (i.e., one directly chosen by all the people subject to it). Whereas Hobbes stresses the disadvantages of the state of nature, Locke points to its good points. It is free.

The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that... no one ought to harm another in his life, health, liberty, or possessions.

Lacking any commonly recognised, impartial judge, there is no way to correct these misapplications or to effectively restrain those who violate the law of nature. The law of nature is therefore ill enforced in the state of nature.

If man in the state of nature be so free, as has been said; if he be absolute lord of his own person and possessions, equal to the greatest, and subject to no body, why will he part with his freedom? Why will he give up this empire, and subject himself to the dominion and control of any other power? To which it is obvious to answer, that though in the state of nature he hath such a right, yet the enjoyment of it is very uncertain, and constantly exposed to the invasion of others: for all being kings as much as he, every man his equal, and the greater part no strict observers of equity and justice, the enjoyment of the property he has in this state is very unsafe, very unsecure. This makes him willing to quit a condition, which, however free, is full of fears and continual dangers: and it is not without reason, that he seeks out, and is willing to join in society with others, who are already united, or have a mind to unite, for the mutual preservation of their lives, liberties and estates, which I call by the general name, property.

It is to avoid the state of war that often occurs in the state of nature, and to protect their private property that men enter into civil or political society, i.e., state of society. By "property" he means "life, liberty, and estate." By saying that political society was established for the better protection of property, he claims that it serves the private (and non-political) interests of its constituent members.

For this account to work, individuals must possess some property outside of society, i.e., in the state of nature: the state cannot be the sole origin of property, declaring what belongs to whom. If the purpose of government is the protection of property, the latter must exist independently of the former. He begins by asserting that each individual, at a minimum, "owns" himself; this is a corollary of each individual's being free and equal in the state of nature. As a result, each must also own his own labour: to deny him his labour would be to make him a slave. Gold does not rot. Neither does silver, or any other precious metal or gem. They are, moreover, useless, their aesthetic value not entering into the equation. One can heap up as much of them as one wishes, or take them in trade for food. By the tacit consent of mankind, they become a form of money (one accepts gold in exchange for apples with the understanding that someone else will accept that gold in exchange for wheat). One can therefore avoid the spoilage limitation by selling all that one has amassed before it rots; the limits on acquisition thus disappear. In this way, Locke argues that a full economic system could, in principle, exist within the state of nature. Property could therefore predate the existence of government, and thus society can be dedicated to the protection of property.

Locke did not demand a republic. Rather, Locke felt that a legitimate contract could easily exist between citizens and a monarchy, an oligarchy or some mixed form. Locke uses the term Common-wealth to mean "not a democracy, or any form of government, but any independent community".

whatever form the Common-wealth is under, the Ruling Power ought to govern by declared and received laws, and not by extemporary dictates and undetermined resolutions."

 Furthermore, governments are charged by the consent of the individual.

the consent of the majority, giving it either by themselves, or their representatives chosen by them

Locke declared that under natural law, all people have the right to life, liberty, and estate; under the social contract, the people could instigate a revolution against the government when it acted against the interests of citizens, to replace the government with one that served the interests of citizens. In some cases, Locke deemed revolution an obligation. The right of revolution thus essentially acted as a safeguard against tyranny.

whenever the Legislators endeavor to take away, and destroy the Property of the People, or to reduce them to Slavery under Arbitrary Power, they put themselves into a state of War with the People, who are thereupon absolved from any farther Obedience, and are left to the common Refuge, which God hath provided for all Men, against Force and Violence. Whensoever therefore the Legislative shall transgress this fundamental Rule of Society; and either by Ambition, Fear, Folly or Corruption, endeavor to grasp themselves, or put into the hands of any other an Absolute Power over the Lives, Liberties, and Estates of the People; By this breach of Trust they forfeit the Power, the People had put into their hands, for quite contrary ends, and it devolves to the People, who have a Right to resume their original Liberty.