The issue of Local Government and State Government control has been on the regular public discuss each time the need for rural development comes into heart of every Nigerians. This is due to near non-existence of this system or the fact that it only exist by location and building structures. The study tried to look back to what the local government was as a third-tier level of government in the provision of governance for the rural people and the picture it has from 1999 with crop of leaders who through the democratic experiment which lasted till 2003 saw to it that local government became a historic level of government known to have performed in the past through state houses of assemblies and the legality of SJLGA and the JAAC. Conscious of what local government under a federal system of government should represent for service provision and rural administration, some factors responsible for failures of local government in contributing its quota to national development which includes; unconstituted councils, lack of patriotism and commitment among elected and appointed officials, use of unqualified officials in the administration of the local government for political and selfish interest, corruption among tenured and career officials, local government as ground of political settlement for boys who facilitates winning elections and low capacity utilization of abundant skilled and other material resources. The relationship between the local Government and other state ministries/commissions and that of federal government was also given a touch in this study. Emphasis was placed on the principles of good governance as the basis for realizing the constitutional objectives of all levels of government with particular reference to local Government.