Labeling of a code as a language or dialect is a process that involves multiple stakeholders. Fundamentally, the notions of language and dialect are not linguistic but ideological constructs. Academic and political definitions often overlap, but can also potentially be at odds with each other. This paper attempts to explore this dilemma by looking at linguistic and ethnographic data from two Nicobari codes in Central Nicobar; namely Lurö and Sanenyö. These codes have been labeled as part of a dialect chain based on lexicographic data as well as computational phylogenetic analyses. However, the speakers claim that these codes are distinct languages and that Lurö is not understood or spoken by Sanenyö speakers. Adding to this, ethnographic observations made during in-situ fieldwork on Teressa Island where both codes are spoken, paints a different picture and complicates the matter. It would seem that language labels, ways of speaking and meta-linguistic commentary are creatively employed by the speakers in order to negotiate with ongoing transformations in the power hierarchies on the island. The paper will analyze language structure, linguistic practices and language ideologies to understand how linguistic differentiation is produced and the role it plays in the (re)creation of socio-political formulations.