Itagaki Taisuke was appointed a Councilor of State in 1869, and was involved in several key reforms, such as the abolition of the han system in 1871. As a sangi (councillor), he ran the government temporarily during the absence of the Iwakura Mission.
However, Itagaki resigned from the Meiji government in 1873 over disagreement with the government's policy of restraint toward Korea (Seikan-ron) and, more generally, in opposition to the Choushuu-Satsuma domination of the new government.
In 1874, together with Gotou Shoujirou of Tosa and Etou Shimpei and Soejima Taneomi of Hizen, he formed the Aikoku Koutou (Public Party of Patriots), declaring, "We, the thirty millions of people in Japan are all equally endowed with certain definite rights, among which are those of enjoying and defending life and liberty, acquiring and possessing property, and obtaining a livelihood and pursuing happiness. These rights are by Nature bestowed upon all men, and, therefore, cannot be taken away by the power of any man." This anti-government stance appealed to the discontented remnants of the samurai class and the rural aristocracy (who resented centralized taxation) and peasants (who were discontented with high prices and low wages). Itagaki's involvement in liberalism lent it political legitimacy in Japan, and he became a leader of the push for democratic reform.
Itagaki and his associations created a variety of organizations to fuse samurai ethos with western liberalism and to agitate for a national assembly, written constitution and limits to arbitrary exercise of power by the government. These included the Risshisha (Self-Help Movement) and the Aikokusha (Society of Patriots) in 1875. After funding issues led to initial stagnation, the Aikokusha was revived in 1878 and agitated with increasing success as part of the Freedom and People's Rights Movement. The Movement drew the ire of the government and its supporters. In 1882, Itagaki was almost assassinated by a right-wing militant, to whom he allegedly said, "Itagaki may die, but liberty never!"