Social research that informs the implementation of natural resource policies is frequently driven by the logic of the policy system itself. A prevailing concern with achieving policy outcomes can lead, however, to lack of attention to equally important aspects, for example the challenges the policy instruments present to those they are targeting and the consequences this might have for government–citizen relationships. To help guide research into these issues we have developed a situational–interactional approach to interpretive policy analysis that seeks to examine the processes involved when people collectively make sense of government instruments. The theoretical basis is provided to a large extent by Luhmann’s theory of self-referential social systems. In addition, we operationalise the concepts of interactional framing and resemiotisation to capture the active work of the citizens in sense-making processes. We then apply our situational–interactional analysis to small-scale forest ownership in Flanders. Analysis of data from focus groups with forest owners reveals how interactions build on each other in the co-development of particular strategies to cope with government intervention. Finally, we discuss two future directions for research. First, the forest owners find themselves in an inescapable relationship with the government, and feel their autonomy is threatened. Government intervention, therefore, will almost necessarily lead to resistance. Second, forest groups enhance compatibility between the government system and the forest owners, but rather than narrowing the gap between the two worlds they tend to emphasise it.