This story is recounted by a little Parsi girl called Lenny. It concerns families of diverse religious backgrounds, Sikh, Muslim, Hindu, and Parsi, living in Lahore before the partition. While the Parsi family is prosperous, the rest of the families are shown as struggling to make a livelihood.
Winds of change blow across the country, in 1947, when the British decide to grant independence to India. The decision announced by Lord Mountbatten, the British viceroy, meant that the date for independence was just a few months, not a few years, in the future. , and left the country unprepared to deal with the rivalries between Hindus and Muslims. The partition of India and Pakistan along religious lines led to bloodshed, massacre and, as this film says, "the largest and most terrible exchange of population in history", and that's when law and order break down, and chaos, anarchy, and destruction take over, resulting in millions of deaths, and millions more rendered homeless and destitute.
In this movie, Shanta (Nandita Das) is Lenny's nanny , who is in love with Hassan (Rahul Khanna) , a Muslim, while Dil Navaz (Aamir Khan) loves Shanta, and wants her to be his wife, she prefers Hassan over him. This decision will have disastrous effects on everyone concerned, including the ones involved in ferrying Hindus across the border into India.