The standard interpretation of quantum measurement on entangled systems holds that measuring one particle nonlocally collapses the wavefunction of its spacelike-separated partner. We argue that this conclusion rests on a false presupposition: that subsystems of entangled systems possess independent ontic states. If the global wavefunction is the sole ontic object (ψ-ontic holism), then for entangled systems there is no “state of B” to be affected by measurement at A. The reduced density matrix of a subsystem, while operationally useful, is not ontologically real for non-factorizable states. Measurement is a local dynamical process — concretely modeled by continuous spontaneous localization (CSL) — that destroys one local wavefunction component at the measurement site. The global state factorizes as a consequence, and subsystem ontology emerges for the first time. The transition of the distant particle’s reduced density matrix from mixed to pure reflects this emergence of separability, not a physical change at the distant location. We show that this framework is consistent with no-signaling, with the contextuality required by the Kochen–Specker and GHZ theorems, and with the local measurement axiom (Postulate M) proposed in a companion paper. Bell’s theorem does not force nonlocality upon our framework because it presupposes outcome determinism — the assignment of definite values to observables prior to measurement — which several quantum mechanical theorems and our ψ-ontic ontology explicitly deny. Decoherence, which is ubiquitous in nature, provides the mechanism by which the global wavefunction factorizes and classical separability emerges. The apparent nonlocality of quantum mechanics is thus reinterpreted as nonseparability: the fundamental ontology is holistic, but the dynamics are local.