On the first day on his supposed isle, Sancho goes to bed still hungry. He discovers that a physician there will not allow him to eat anything out of fear that it could be bad for him. Furious, Sancho threatens this physician and casts him out of the room. A courier then appears. He has a letter from the Duke informing Sancho that he has found out about a plan to attack the isle and kill its governor. Sancho starts to believe that the physician is among the men wanting to take his life. A businessman arrives to request that Sancho provide a letter of recommendation of his son, who is “bewitched” (he likely suffers from autism), to marry the hunchbacked and maimed daughter of his neighbor. The businessman asks Sancho for six hundred ducats. Sancho becomes extremely angry and threatens his life.
That night, Dona Rodriguez creeps into Don Quixote’s chamber to request a favor. She tells him the story of her daughter, who was wooed by the farmer’s son. He now refuses to marry her. Th Duke has refused to compel the young man to marry Dona Rodriguez’s daughter, as the farmer is wealthy and the Duke does not wish to risk losing the funds he collects from him. Don Quixote says that he will provide assistance. She tells him that the Duchess’s beautiful complexion is due to the physician draining the evil humor from her legs. Dona Rodriguez’s announcement is shocking to the gentleman, as he had thought the Duchess to be an upright lady. However, he admits it must be true if Dona Rodriguez says it is so. Someone then rushes in and pinches and slaps both Don Quixote and Dona Rodriguez.
Two criminal incidents are witnessed by Sancho on his rounds. He then sees a young girl who is dressed as a boy. The girl starts to cry, confiding in Sancho that her father, a widower, forces her to stay locked up day and night and will not allow her out into the world. She is wearing her brother’s clothes, and wants to see the town to satisfy her curiosity. As she tells Sancho her story, her brother is caught by a guard. Sancho brings them both home and tells them they must be more careful next time.
We learn that Altisidora and the Duchess were listening outside the gentleman’s door when Dona Rodriguez told Don Quixote about the Duchess’s legs. It was the Duchess and Altisidora who rushed in and attacked the two. The Duchess then sent a page to Teresa Panza to bring Sancho his letter, along with a letter and a coral necklace from the Duchess. Teresa takes the pages and is made happy the news that her husband is now a governor. She rushes to tell the priest and Sampson. They do not believe her until they confer with the page. Sampson says he will take dictation for the letter Teresa needs to write. She does not trust him, however, and decides she would prefer to have a friar write it for her.
The morning following his rounds, Sancho hears of the petition of certain judges who are unable to decide whether to hang a man. The judges sit beside a bridge whose owner says that anyone hoping to cross it must disclose where he or she is going. If the person discloses the truth, he or she will be allowed to pass. However, if he or she lies, he or she will be hanged on the gallows found on the other side. If they allow him to go free, the man will be condemned by law to hang on the gallows. If they hang him, however, then they are obliged to subsequently free him. Sancho allows a man to go free, saying it is better to be too lenient than too harsh.
Sancho gets a letter from Don Quixote that offers additional advice on governing, along with news that he plans to take an action that will make the Duke and Duchess angry. Sancho’s reply is a long letter with a great deal of news, asking that Don Quixote refrain from provoking the Duke and Duchess, as he is afraid of losing his governorship. Sancho then enacts the only laws he will impose during his time as governor: a declaration that wine can be imported from anywhere as long as the place of origin is clearly stated, as well as a declaration that he will reduce the price of footwear, fix servant wages, and stop the blind from singing about miracles unless the miracles actually happened. These laws make the populace happy, so much so that they stay in effect and the people refer to them as “The Constitutions of the great Governor Sancho Panza.”
Don Quixote’s wounds from the cat attack are now healed, and he decides to depart for the jousting tournament to be held in Saragossa. Before he has a chance to ask the Duke’s permission to leave, though, Dona Rodriguez and her daughter come into the great hall and throw themselves at the gentleman’s feet. They beg him to avenge the wrong done to them by the farmer’s son. Don Quixote says he will do so, and the Duke agrees to set up a duel. After seeing Teresa Panza, the page comes back with a letter from her to the Duchess, as well as one for Sancho. Both letters are read by the group. The letter addressed to the Duchess talks of Teresa’s wish to go to court in a coach so that she may do honor to Sancho’s name. Teresa also encloses some acorns that she has harvested for the Duchess, at the noblewomen’s request. Teresa’s letter to her husband shares her joy in his success and informs him of some village news. The groups laughs at these letters in amazement, even applauding.
Late at night after his seventh day as governor, Sancho hears what sound to be a cry of attack. His people play a joke on him, urging him to go and fight off the supposed enemies. They place him snugly between two shields and compel him to start marching, but he is unable to march and falls down. They trample him on the ground. They then claim to Sancho that they have defeated the enemy. They praise him. However, Sancho declares that he is now obliged to abdicate as governor, as he was never intended to lead. He declares that he will notify the Duke of his decision, and he departs with this faithful Dapple.