Community led local development (CLLD) is a tool of the European Commission, used for territorial development. Local Action Groups were funded in the rural areas of Romania, since the 2007-2013 programming period through LEADER, demonstrating positive effects in terms of social innovation and disproof of social disparities. In urban areas, CLLD is a recent multi-fund approach, financed by the European Social Fund (ESF) and the European Regional Development Fund (ERDF). Despite the intentions addressed for simplifying the implementation of the mechanism by the Romanian authorities, several challenges and delays however occurred. The present research reveals the similarities and the main differences between the implementation of the mechanism, in urban and rural areasesides, it proposes a set of recommendations to increase the efficiency of the studied mechanism, based on a case study on the implementation of the CLLD mechanism in Gherla, Romania.