The collapse of the Indonesia authoritarian regime in 1998 further elevated the role of the local level groups including Forest Farmer Groups (FFGs) in rural development. This research aims to describe changing the role of FFGs due to the formalization process of development which established them as the only partners at the local level. Taking the case of forest farmer groups in three chosen villages by anthropologic approaches, formalization of development policies to push forest farmer groups from purely serving the role of development agent to fulfillment of legal conditions for a project to run, giving rise to bribery and other corrupt behaviors. Policies stating that farmer groups are the only grassroots partners eventually forces development agents to hire these groups as partners only for capturing and controlling the program by elites both locally and outside villages. Reflecting on the issue above, it is necessary to revisit the development formalization policy pertaining to forest farmer groups’ involvement as to their relevance or irrelevance, especially in the case of forest resources management and rural development on the micro scale. In addition, a model of forest farmer group organizational improvement as well as human resources, especially in terms of rules and succession to make the groups more dynamic and responsive to social environment changes. This research is limited to changes in the role of FFGs in forest management, while the resources they manage will continue to increase in line with government policies to involve them in projects outside forest management.