The cortico-striatal-thalamo-cortical (CSTC) pathway is a brain circuit that controls movement execution, habit formation and reward. Hyperactivity in the CSTC pathway is involved in obsessive compulsive disorder (OCD), a neuropsychiatric disorder characterized by the execution of repetitive involuntary movements. The striatum shapes the activity of the CSTC pathway through the coordinated activation of two classes of medium spiny neurons (MSNs) expressing D1 or D2 dopamine receptors. The exact mechanisms by which balanced excitation/inhibition (E/I) of these cells controls the network dynamics of the CSTC pathway remain unclear. Here we use non-linear modeling of neuronal activity and bifurcation theory to investigate how global and local changes in E/I of MSNs regulate the activity of the CSTC pathway. Our findings indicate that a global and proportionate increase in E/I pushes the system to states of generalized hyper-activity throughout the entire CSTC pathway. Certain disproportionate changes in global E/I trigger network oscillations. Local changes in the E/I of MSNs generate specific oscillatory behaviors in MSNs and in the CSTC pathway. These findings indicate that subtle changes in the relative strength of E/I of MSNs can powerfully control the network dynamics of the CSTC pathway in ways that are not easily predicted by its synaptic connections.