Several neurological and psychiatric disorders present hyperexcitability of neurons in specific regions of the brain or spinal cord, partly because of some loss and/or dysfunction of gammaamino butyric acid positive (GABA-ergic) inhibitory interneurons. Strategies that enhance inhibitory neurotransmission in the affected brain regions may therefore ease several or most deficits linked to these disorders. This perception has incited a huge interest in testing the efficacy of GABA-ergic interneuron cell grafting into regions of the brain or spinal cord exhibiting hyperexcitability, dearth of GABA-ergic interneurons or impaired inhibitory neurotransmission, using preclinical models of neurological and psychiatric disorders. Interneuron progenitors from the embryonic ventral telencephalon capable of differentiating into diverse subclasses of interneurons have particularly received much consideration because of their ability for dispersion, migration and integration with the host neural circuitry after grafting. The goal of this review is to discuss the premise, scope and advancement of GABA-ergic cell therapy for easing neurological deficits in preclinical models of schizophrenia, chronic neuropathic pain, Alzheimer's disease and Parkinson's disease. As grafting studies in these prototypes have so far utilized either primary cells from the embryonic medial and lateral ganglionic eminences or neural progenitor cells expanded from these eminences as donor material, the proficiency of these cell types is highlighted. Moreover, future studies that are essential prior to considering the possible clinical application of these cells for the above neurological conditions are proposed. Particularly, the need for grafting studies utilizing medial ganglionic eminence-like progenitors generated from human pluripotent stem cells via directed differentiation approaches or somatic cells through direct reprogramming methods are emphasized.