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Does SharePoint allow app-only access to Term Store? I'm trying to update Term Store via app-only access. Is this possible? Its working with user delegation, because user can be added to Term Store administrators in SharePoint admin panel. However I cannot find a way to add my Service Principal (created by consent framework because application is Multi tenant).

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No, It is not possible to update the Term Store with app-only permission. You must use user credentials that have Term Store Administrator rights.

Even though there is a permission scope for this, it evidently doesn't do anything. Sorry I don't have a link for reference.

Reference

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