Degenerately doped semiconductor nanocrystals (NCs) exhibit a localized surface plasmon resonance (LSPR) in the infrared range of the electromagnetic spectrum. Unlike metals, semiconductor NCs offer tunable LSPR characteristics enabled by doping, or via electrochemical or photochemical charging. Tuning plasmonic properties through carrier density modulation suggests potential applications in smart optoelectronics, catalysis and sensing. Here, we elucidate fundamental aspects of LSPR modulation through dynamic carrier density tuning in Sn-doped In2O3 (Sn: In2O3) NCs. Monodisperse Sn: In2O3 NCs with various doping levels and sizes were synthesized and assembled in uniform films. NC films were then charged in an in situ electrochemical cell and the LSPR modulation spectra were monitored. Based on spectral shifts and intensity modulation of the LSPR, combined with optical modelling, it was found that often-neglected semiconductor properties, specifically band structure modification due to doping and surface states, strongly affect LSPR modulation. Fermi level pinning by surface defect states creates a surface depletion layer that alters the LSPR properties; it determines the extent of LSPR frequency modulation, diminishes the expected near-field enhancement, and strongly reduces sensitivity of the LSPR to the surroundings.