Participatory approaches within development programs involving common-pool resources are intended to revive a community’s role in managing these resources. Certainly, to ensure the successful and equitable use of such resources, community participation is essential. However, in many cases, attempts at applying a participatory approach often fail to genuinely engage all subgroups within a community due to assumptions of homogeneity and a lack of understanding of the deep socio-political divisions between people. As a result, development programs can be plagued by these pre-existing power relations, potentially resulting in tokenistic community participation and the continuation of elite capture of natural resources to the same extent or worse than before a development program has begun. This in turn can negatively impact good governance and the fair distribution of a common pool resource. This paper explores the use of participatory approaches in water projects, assessing to what degree power relationships impact water management programs. Using a qualitative approach, the paper identifies key challenges of participatory water governance through case studies from Turkey, India, and Sri Lanka, exploring: lack of social trust, elite capture of participatory processes, power heterogeneity and imbalances at the micro-level, and a lack of inclusive participation in decision-making. Based on the analysis of these case studies, this paper argues that it is essential for participatory development interventions to understand socio-political power relations within a community—an inherently complex and contested space. The so-called “exist-strategies” of a community project play a key role to decide the project sustainability that grants the “community ownership” of the project. Such an understanding can bring about greater success in development interventions attempting to address water-related issues.