The joint “International Forests and Water Conference 2018” highlighted among its main conclusions the need to involve the viewpoint and participation of local communities in the management and monitoring of forest watersheds. This topic constitutes a strategic and transverse challenge for the sciences and public policies in the current context of global climate change. As a contribution to this challenge, the aim of this research was to qualitatively describe and analyze a territorial intervention model based on two case studies. Both involve stakeholders from the public sector, forest companies, and rural communities within the framework of implementing a participatory process at a local scale. The first case study was based on the collective creation of a set of indicators for local water monitoring. The second case, through the incorporation of the social and local dimension, culminated in the collective creation of a forest watershed management guide. The research hypothesis was that the inclusion of stakeholders and local knowledge in forest watershed management is essential to create and/or strengthen local abilities that ensure the involvement of communities in water governance, surpassing the current informative and consultative approaches. The research methodology was qualitative, and the data collection strategies were focused on the compilation of the process, the participatory work, and gathering diverse local knowledge. The data analysis included content tabulation, including both local indicators and ones extracted from the guide. In both cases, the systematization process and the main empirical findings were included. Among the findings, it was observed that both the pilot of local indicators and the design of the forest watershed management guide confirmed that the main challenge of local participation is the effective inclusion of local knowledge in water governance. This ethical and methodological challenge must be approached more rigorously and with more commitment.