For any responsive and dependable political system, the development of the rural areas must be its major concern. Development will be insignificant in such a political system if the government does not positively affect the life of the people of the grassroots or if development eludes the grassroots dwellers. Therefore, the problem of governance, particularly at the local level, has been in a doldrums in the political history of Nigeria. These problems have been documented and they include corruption and mismanagement, lack of adequate manpower, lack of autonomy, inadequate planning, inadequate revenue, poor implementation of policies, lack of participation by the people and intergovernmental conflict. What this paper will try to do is to focus on these challenges and determine the factors responsible for them and suggest some relevant way forward in order to ameliorate the difficulties. This paper, therefore, concludes strongly that since the problems of local government in Nigeria are copious, adequate and practical solutions are needed. These include: the expansion of democratic space, the entrenchment of democratic culture and the promotion of good governance, transparency and accountability. Without these solutions, rural development of the grassroots will be a mirage.