When power is taken away from Central and State governments and given to local government, it is called decentralisation. The basic idea behind decentralisation is that there are many problems and issues which are best settled at the local level.
1. People have better knowledge of problems in their localities.
2. They also have better ideas on where to spend money and how to manage things more efficiently.
3. Besides, at the local level it is possible for the people to directly participate in decision making.
4. This helps to inculcate a habit of democratic participation. Local government is the best way to realise one important principle of democracy, namely local selfgovernment, or self-rule. Local Government is thus an effective way to uphold the democratic principle of decentralization.