The Crown season 4 reveals that several of Queen Elizabeth II's cousins were secretly institutionalized, but how much of the story is actually true? Written by series creator Peter Morgan, "The Hereditary Principle" focuses on Princess Margaret's depression after losing her status within the Royal Family, along with part of a lung, and then discovering the tragic truth about her relatives Nerissa and Katherine Bowes-Lyon.
In The Crown, Princess Margaret (Helena Bonham Carter) admits to feeling "low." She discusses the history of mental health problems within the family, and jokingly states the Prince of Wales' issues are the result of marriage, rather than stemming from a condition. In response, the therapist brings up "the sisters," and wrongfully assumes that Margaret knows that she's talking about her first-cousins Nerissa and Katherine Bowes-Lyon being hospitalized decades prior for a genetic disorder. The Princess later discusses the matter with Queen Elizabeth II (Olivia Colman), who claims that the relatives are "long dead," which is seemingly confirmed by the aristocratic record book Burke’s Peerage. However, Margaret subsequently discovers that Nerissa and Katherine are indeed alive, and that they know all about their bloodline connection to the Queen.
The Queen's first-cousins were actually institutionalized in 1941 at the Earlswood Institution for Mental Defectives. At the time, Nerissa was 15 and Katherine was 22. They were the daughters of John and Fenella Bowes-Lyon, with the former being the older brother of Elizabeth, the Queen (and later the Queen Mother). In 1986, The Sun published an exposé about the Royal Family, which revealed that Nerissa and Katherine had been at the the Earlswood Institution for Mental Defectives for 45 years, and that family members had presumably informed Burke’s Peerage about their deaths. However, the sisters' niece Lady Elizabeth Anson claimed that Fenella - described (via The Oprah Magazine) as "a very vague person" - hadn't properly filled out the paperwork upon the initial hospitalization. In The Crown, Princess Margaret deals with her continued depression by empathizing with her estranged cousins.
When news about the Royal scandal broke in 1986, the Earlswood Institution for Mental Defectives stated that Nerissa and Katherine hadn't received any visitors since the '60s. The Queen Mother reportedly (via Esquire) did send a check, however a hospital administrator revealed in 1987 that Katherine didn't know about her royal family members, and that is was "very difficult" for her to understand the concept (Note: Nerissa Bowes-Lyon died in 1986.). If that's true, The Crown altered the facts for the sake of entertainment.
In The Crown season 4, Princess Margaret learns that she has three more cousins living at the Earlswood Institution for Mental Defectives. This checks out, as Fenella's sister hospitalized three of her own children (Idonea, Etheldreda, and Rosemary) on the same day that Nerissa and Katherine were institutionalized. So, that's the foundation for a Royal conspiracy, as five people with mental health issues were secretly re-located, perhaps for the benefit of the family's reputation. In The Crown season 4, the Queen Mother (Marion Bailey) sums up her philosophy while speaking to Margaret:
“The hereditary principle already hangs by such a precarious thread. Throw in mental illness, and it’s over."