In 1780 he was a part of General Horatio Gates' army that was routed at Camden, South Carolina; his brigade was among the formations that held their ground, garnering Smallwood a promotion to major general. Smallwood's accounts of the battle and criticisms of Gates' behavior before and during the battle may have contributed to the Congressional inquiries into the debacle. Opposed to the hiring and promotion of foreigners, Smallwood objected to working under Baron von Steuben. Smallwood briefly commanded the militia forces of North Carolina in late 1780 and early 1781 before returning to Maryland, staying there for the remainder of the war. He resigned from the Continental Army in 1783 and later that year was admitted as an original member of The Society of the Cincinnati, serving as the first president of the Maryland Society.