This chapter aims to answer why Sri Lanka’s local government authorities have failed to become local self-government, taking Pradheshiya Sabhas as a case in point, which is the closest local political institution. It is argued that the decentralization of powers and autonomy to the local governments continues to be a rhetoric, preventing local communities’ aspirations and demands for inclusive democracy and development at the local levels. The chapter thus finds that weak and vertical types of decentralization mechanisms, limited powers, resources, and autonomy, poor-center periphery relations, excessive control of local elites, and a centralized unitary system of government all have significantly weakened Sri Lanka’s local government authorities. The chapter also argues that Sri Lanka’s local government has become just another administrative arm of the central government, and its framework is outdated and at a crossroads. Due to their inherent weaknesses, Sri Lanka’s local government institutions have failed to achieve social change, participatory local democracy, social equity, local development, and societal democratization.