One of the general features of ferroelectric systems is a complex nature of polarization reversal, which involves domain nucleation and motion of domain walls. Here, time‐resolved nanoscale domain imaging is applied in conjunction with the integral switching current measurements to investigate the mechanism of polarization reversal in yttrium‐doped HfO2 (Y:HfO2)—currently one of the most actively studied ferroelectric systems. More specifically, the effect of film microstructure on the nucleation process is investigated by performing a comparative study of the polarization switching behavior in the epitaxial and polycrystalline Y:HfO2 thin film capacitors. It is found that although the epitaxial Y:HfO2 capacitors tend to switch slower than their polycrystalline counterparts, they exhibit a significantly higher nucleation density and rate, suggesting that this is a rate‐limiting mechanism. In addition, it is observed that under the external fields approaching the activation field value, the switching kinetics can be described equally well by the nucleation limited switching and the Kolmogorov‐Avrami‐Ishibashi models for both types of capacitors. This signifies convergence of two different mechanisms implying that the polarization reversal proceeds via a homogeneous nucleation process unaffected by the film microstructure, which can be considered as approaching the intrinsic switching limit.