Local government is a generic term for the lowest tiers of governance or public administration within a particular sovereign state.
Local governments typically constitute a subdivision of a higher-level political and/or administrative unit, such as a nation or state. Local governments generally act within the powers and functions assigned to them by law and/or directives of a higher level of government. In federal states, local government generally comprises a third or fourth level of government, whereas in unitary states, local government usually occupies the second or third level of government.
The institutions of local government vary greatly between countries, and even where similar arrangements exist, country-specific terminology often varies. Common designated names for different types of local government entities include counties, districts, cities, townships, towns, boroughs, parishes, municipalities, municipal corporations, shires, villages, and local government areas. The same term may be used in different countries to refer to local governance institutions with vastly different institutional features, powers, or functions.
In addition to general-purpose local governments, some countries have special-purpose local governments (special districts), such as independent school districts, elected water boards, or local service districts.
Although there is no single, commonly accepted definition of the term, the most precise definition of local governments is provided by the International Monetary Fund (IMF), which divides the general government sector into three sub-sectors (central, state, and local government) and defines local governments as "institutional units whose fiscal, legislative, and executive authority extends over the smallest geographical areas distinguished for administrative and political purposes."
The IMF further notes that local governments "typically provide a wide range of services to local residents," while "the scope of their authority is generally much less than that of central government or state governments, and they may or may not be entitled to levy taxes." They are often heavily dependent on grants (transfers) from higher levels of government, and they may also act, to some extent, as agents of central or regional governments. They should also be able to appoint their own officers, independently of external administrative control. Even when local governments act as agents of central or state governments to some extent, they can be treated as a separate level of government, provided they are also able to raise and spend some funds on their own initiative and own responsibility."
Other definitions for local governments are less prescriptive and emphasize the political or representative nature of local governments. For instance, OECD defines local governments as "decentralized entities whose governance bodies are elected through universal suffrage and which has general responsibilities and some autonomy with respect to budget, staff and assets." The Local Public Sector Alliance defines local government institutions as "a corporate body (or institutional unit) that performs one or more public sector functions within a [local] jurisdiction that has adequate political, administrative, and fiscal autonomy and authority to respond to the needs and priorities of its constituents".
Questions regarding the empowerment of local government institutions, the structure and nature of local political leadership, and the extent of local self-governance and municipal autonomy are key questions of public administration and governance. Local elections are held in many countries.
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