MANIFEST.in ignored on "python setup.py install" - no data files installed?

MANIFEST.in tells Distutils what files to include in the source distribution but it does not directly affect what files are installed. For that you need to include the appropriate files in the setup.py file, generally either as package data or as additional files.

I couldn't figure out why my MANIFEST.in file was being ignored when I ran python setup.py install - turns out include_package_data=True solves the problem. The package_data option isn't actually required.

Some notes in addition to Ned's answer (which hits on the core problem):

Distutils does not install Python packages and modules inside a per-project subdirectory within site-packages (or dist-packages on Debian/Ubuntu): they are installed directly into site-packages, as you've seen. So the containing whyteboard-xx directory in your sdist will not exist in the final installed form.

One implication of this is that you should be careful to name your data_files in a way that clarifies what project they belong to, because those files/directories are installed directly into the global site-packages directory, not inside any containing whyteboard directory.

Or you could instead make your data package_data of the whyteboard package (which means it needs to live inside that package, i.e. next to __init__.py), and then this isn't a problem.

Lastly, it doesn't make much sense to have both a whyteboard.py module in py_modules and a whyteboard/__init__.py package in packages. The two are mutually exclusive, and if you have both, the whyteboard.py module will be ignored by imports in favor of the package of the same name.

If whyteboard.py is just a script, and is not intended to be imported, then you should use the scripts option for it, and remove it from py_modules.