diff --git a/error.py b/error.py
index 2fb6aa0f..25ff80d1 100644
--- a/error.py
+++ b/error.py
@@ -22,12 +22,12 @@ class ManifestParseError(Exception):
   """
 
 
-class ManifestInvalidRevisionError(Exception):
+class ManifestInvalidRevisionError(ManifestParseError):
   """The revision value in a project is incorrect.
   """
 
 
-class ManifestInvalidPathError(Exception):
+class ManifestInvalidPathError(ManifestParseError):
   """A path used in <copyfile> or <linkfile> is incorrect.
   """
 
diff --git a/manifest_xml.py b/manifest_xml.py
index cd5954df..e96e0620 100644
--- a/manifest_xml.py
+++ b/manifest_xml.py
@@ -624,16 +624,22 @@ https://gerrit.googlesource.com/git-repo/+/HEAD/docs/manifest-format.md
         b = b[len(R_HEADS):]
       self.branch = b
 
+      # The manifestFile was specified by the user which is why we allow include
+      # paths to point anywhere.
       nodes = []
-      nodes.append(self._ParseManifestXml(self.manifestFile,
-                                          self.manifestProject.worktree))
+      nodes.append(self._ParseManifestXml(
+          self.manifestFile, self.manifestProject.worktree,
+          restrict_includes=False))
 
       if self._load_local_manifests and self.local_manifests:
         try:
           for local_file in sorted(platform_utils.listdir(self.local_manifests)):
             if local_file.endswith('.xml'):
               local = os.path.join(self.local_manifests, local_file)
-              nodes.append(self._ParseManifestXml(local, self.repodir))
+              # Since local manifests are entirely managed by the user, allow
+              # them to point anywhere the user wants.
+              nodes.append(self._ParseManifestXml(
+                  local, self.repodir, restrict_includes=False))
         except OSError:
           pass
 
@@ -651,7 +657,19 @@ https://gerrit.googlesource.com/git-repo/+/HEAD/docs/manifest-format.md
 
       self._loaded = True
 
-  def _ParseManifestXml(self, path, include_root, parent_groups=''):
+  def _ParseManifestXml(self, path, include_root, parent_groups='',
+                        restrict_includes=True):
+    """Parse a manifest XML and return the computed nodes.
+
+    Args:
+      path: The XML file to read & parse.
+      include_root: The path to interpret include "name"s relative to.
+      parent_groups: The groups to apply to this projects.
+      restrict_includes: Whether to constrain the "name" attribute of includes.
+
+    Returns:
+      List of XML nodes.
+    """
     try:
       root = xml.dom.minidom.parse(path)
     except (OSError, xml.parsers.expat.ExpatError) as e:
@@ -670,10 +688,11 @@ https://gerrit.googlesource.com/git-repo/+/HEAD/docs/manifest-format.md
     for node in manifest.childNodes:
       if node.nodeName == 'include':
         name = self._reqatt(node, 'name')
-        msg = self._CheckLocalPath(name)
-        if msg:
-          raise ManifestInvalidPathError(
-              '<include> invalid "name": %s: %s' % (name, msg))
+        if restrict_includes:
+          msg = self._CheckLocalPath(name)
+          if msg:
+            raise ManifestInvalidPathError(
+                '<include> invalid "name": %s: %s' % (name, msg))
         include_groups = ''
         if parent_groups:
           include_groups = parent_groups
@@ -681,13 +700,13 @@ https://gerrit.googlesource.com/git-repo/+/HEAD/docs/manifest-format.md
           include_groups = node.getAttribute('groups') + ',' + include_groups
         fp = os.path.join(include_root, name)
         if not os.path.isfile(fp):
-          raise ManifestParseError("include %s doesn't exist or isn't a file"
-                                   % (name,))
+          raise ManifestParseError("include [%s/]%s doesn't exist or isn't a file"
+                                   % (include_root, name))
         try:
           nodes.extend(self._ParseManifestXml(fp, include_root, include_groups))
         # should isolate this to the exact exception, but that's
         # tricky.  actual parsing implementation may vary.
-        except (KeyboardInterrupt, RuntimeError, SystemExit):
+        except (KeyboardInterrupt, RuntimeError, SystemExit, ManifestParseError):
           raise
         except Exception as e:
           raise ManifestParseError(
diff --git a/tests/test_manifest_xml.py b/tests/test_manifest_xml.py
index f69e9cf8..6977b417 100644
--- a/tests/test_manifest_xml.py
+++ b/tests/test_manifest_xml.py
@@ -298,8 +298,8 @@ class IncludeElementTests(ManifestParseTestCase):
         # Check level2 proj group not removed.
         self.assertIn('l2g1', proj.groups)
 
-  def test_bad_name_checks(self):
-    """Check handling of bad name attribute."""
+  def test_allow_bad_name_from_user(self):
+    """Check handling of bad name attribute from the user's input."""
     def parse(name):
       manifest = self.getXmlManifest(f"""
 <manifest>
@@ -307,6 +307,34 @@ class IncludeElementTests(ManifestParseTestCase):
   <default remote="default-remote" revision="refs/heads/main" />
   <include name="{name}" />
 </manifest>
+""")
+      # Force the manifest to be parsed.
+      manifest.ToXml()
+
+    # Setup target of the include.
+    target = os.path.join(self.tempdir, 'target.xml')
+    with open(target, 'w') as fp:
+      fp.write('<manifest></manifest>')
+
+    # Include with absolute path.
+    parse(os.path.abspath(target))
+
+    # Include with relative path.
+    parse(os.path.relpath(target, self.manifest_dir))
+
+  def test_bad_name_checks(self):
+    """Check handling of bad name attribute."""
+    def parse(name):
+      # Setup target of the include.
+      with open(os.path.join(self.manifest_dir, 'target.xml'), 'w') as fp:
+        fp.write(f'<manifest><include name="{name}"/></manifest>')
+
+      manifest = self.getXmlManifest("""
+<manifest>
+  <remote name="default-remote" fetch="http://localhost" />
+  <default remote="default-remote" revision="refs/heads/main" />
+  <include name="target.xml" />
+</manifest>
 """)
       # Force the manifest to be parsed.
       manifest.ToXml()