Nigeria is a decentralised federation with a three-tier system of federal, state and local governments. Arising from this decentralisation, local governments are empowered to exercise certain powers and responsibilities in areas relating to grassroots development, local democracy and service delivery. Hence, local government plays a pivotal role in local governance. This paper synthesises studies on local government in Nigeria within the broader context of decentralisation and local governance. It takes a careful look at the emergence of local government in Nigeria as well as the debate on local government autonomy. The paper reveals that Nigeria’s decentralisation policy has largely failed to deliver autonomy to local governments, whose funds, functions and activities are controlled by state governments. Key challenges to the effective performance of local government include inadequate funding, constitutional ambivalence, abuse of state control, political instability and corruption. The paper ends with recommendations for improving the functioning of local government to enhance local governance.