Peer-to-peer networks (P2P) are beginning to form the infrastructure of future applications. One of the problems with unstructured P2P networks is their scalability limitation. This is also the problem in structured P2P networks that use broadcasting to find objects. These networks can?t contain a large number of nodes because of the large amount of traffic that they have to handle. Local indexing is a method to reduce this traffic. But local indexes tend to become large with the growth of the network. Also limiting the size of these indexes causes loss of indexing information. In this paper we introduce a novel ontology based local index which limits the size of the local indexes without losing indexing information. We show that the method can be employed by many P2P networks. We also, as an example, apply this local index on HyperCup overlay network, and show that it reduces the network traffic significantly.