Yang's 1974 to 1991 research on individual modernity and traditionalism in Taiwan is examined and the methodology for developing measurement instruments in this program critiqued. It is proposed that the proper strategy for research on indigenous psychology is to analyze a culture at the conceptual level with the symbolic approach, and then conduct empirical research on ‘lifeworlds’ using activity theory. Yang's research on individual modernity and traditionalism uses an inductive empirical approach without the theoretical grounding of conceptual analyses. Based on the philosophy of constructive realism, two types of knowledge (the scientific ‘microworld’ and the ‘experienced lifeworld’) are differentiated in order to explicate the significance of the discontinuity hypothesis of modernity for non‐Western countries and to critique Yang's methodology for measuring individual modernity and traditionalism. It is proposed that the research strategy of cultural psychology be used in future study. This replacement would usher in the indigenous psychology approach as is evident in Yang's (1999, Yang, 2000) later works.