It was a separate entity. While Charles was Charles V in the HRE, he was Carlos I in Castile and his other Iberian dominions. Kingship of large states in the early modern period was what historians like J. H. Elliott called a "composite monarchy." Thus monarchs were not head of a unitary state, but rather multiple polities in which there was a constant give-and-take between the monarch and elite governing bodies like the Cortes of Castile. Charles V's full title gives a good sense of how complex being a monarch in the early modern period could be:

Charles, by the grace of God, Holy Roman Emperor, forever August, King of Germany, King of Italy, King of all Spains, of Castile, Aragon, León, of Hungary, of Dalmatia, of Croatia, Navarra, Grenada, Toledo, Valencia, Galicia, Majorca, Sevilla, Cordova, Murcia, Jaén, Algarves, Algeciras, Gibraltar, the Canary Islands, King of Two Sicilies, of Sardinia, Corsica, King of Jerusalem, King of the Western and Eastern Indies, of the Islands and Mainland of the Ocean Sea, Archduke of Austria, Duke of Burgundy, Brabant, Lorraine, Styria, Carinthia, Carniola, Limburg, Luxembourg, Gelderland, Neopatria, Württemberg, Landgrave of Alsace, Prince of Swabia, Asturia and Catalonia, Count of Flanders, Habsburg, Tyrol, Gorizia, Barcelona, Artois, Burgundy Palatine, Hainaut, Holland, Seeland, Ferrette, Kyburg, Namur, Roussillon, Cerdagne, Drenthe, Zutphen, Margrave of the Holy Roman Empire, Burgau, Oristano and Gociano, Lord of Frisia, the Wendish March, Pordenone, Biscay, Molin, Salins, Tripoli and Mechelen.

Some of these titles represent prestige titles in which lordship was just historical, like King of Jerusalem, but a good many of them were active titles and Charles V had to engage with active negotiations, either through a royal visitation or through proxies, to be rewarded these full powers.

This type of composite monarchy was not atypical for this period, but the scale of Charles V's dominions did make it difficult to govern his patrimony. In Iberia, many elites were upset over their sovereign spending so much of their treasure for his wars in Germany and Italy, leading not only to persistent headaches for Charles V, but also a serious revolt, the Comuneros. The complexity of these dominions was why Charles V towards the end of his life sought to split up his Habsburg patrimony among his immediate family. This was why his brother Ferdinand succeeded him as HRE Emperor, and there was likely a scheme that Charles V's son Philip II would give up his Spanish throne to his son Carlos and Philip II would rule England and the Low Countries both by virtue of his relationship to his father and Philip's marriage to Mary I. This latter splitting of the empire failed, both due to Carlos's own mental instability and mysterious death as well as Mary I's own premature death likely due to uterine cancer.