This chapter builds on the discussion of rule systems in the previous chapter and addresses a major issue in modern morphological theory: the opposition of morpheme-based and paradigm-based approaches to morphological systems. Historically, these two opposing approaches can be traced to two distinct origins: morpheme-based approaches developed in the West following contact with the morpheme-based Pāṇinian approach to grammar, and paradigm-based approaches reflecting the inheritance from traditional Hellenistic and Roman grammar. Stump’s four-way decomposition of approaches to morphological theory is explored, and Pāṇini’s position within this framework is reassessed.