How should I manage state in a large React project?

React Query (or RTK Query) for server state, since they handle caching, invalidation, and loading states for you. Redux for complex shared client state that changes often and interacts across many components. They solve different problems.

For state used by many distant components like auth and theme, Context. For one or two close components, local state. Lifting everything to the root creates a giant root component and excessive re-renders, so keep state close to where it is used.

When your shared state is complex, frequently updated, and has many interactions across components. If Context is causing unnecessary re-renders or your state logic is hard to follow, Redux Toolkit is worth the investment.