Although a Conservative Party member of the London County Council, she developed a reputation as someone with liberal views on social reform. For example, Douglas-Pennant was an active supporter of the Workers' Educational Association and in 1911 the Liberal Government appointed her as National Health Insurance Commissioner for Wales. Douglas-Pennant's salary of £1,000 a year made her the most highly paid woman in Britain.

Douglas-Pennant became an important political figure during the First World War. An organiser of the Scottish Women's Hospital Unit she helped form the Women's Army Auxiliary Corp (WAAC) and was involved in the recruiting campaign for the Women's Royal Naval Service (WRNS).

Douglas-Pennant to become commander of the Women's Royal Air Force. It was not long before Douglas-Pennant got the impression that the Royal Air Force was not fully committed to the WRAF . She was given no secretarial help and had difficulty getting the use of a staff car for official journeys. Douglas-Pennant resigned but agreed to go back after being promised that her complaints would be dealt with.

Sir William Weir, Secretary of State for Air, asked Lady Margaret Rhondda, Director of of Women's Department of the Ministry of National Service, to report on the state of the WRAF. Rhondda's report was highly critical of Douglas-Pennant, and Weir decided to dismiss her as Commandant of the WRAF and replace her with Helen Gwynne-Vaughan, Overseas Commander of the Women's Army Auxiliary Corps (WAAC). Politicians and trade union leaders were appalled by the treatment of Douglas-Pennant. Lord Ampthill, Mary Macarthur and Jimmy Thomas sent a letter of complaint to the Daily Telegraph about Weir's behaviour.

After the matter was raised in the House of Commons it was decided to set up a House of Lords Committee Inquiry. Douglas-Pennant's case was not helped by making false accusations against several of the witnesses. Douglas-Pennant lost her case and was also successfully sued by two of the libelled witnesses and had to pay substantial damages.

The report can be read in the National Archives.

 See Lord Penhryn