The reformist project of local democracy that found practical expression in the first elections of 1999 took place against the backdrop of what the scholar Merilee Grindle called the period of “decentralization revolution” that swept across many countries of the world starting in the 1980s. The decentralization reforms in Indonesia and China, the former embracing political decentralization and the latter rejecting local elections and focusing only on fiscal and administrative decentralization, are briefly discussed as a point of comparison with Iranian case. The reformists motivations to pursue democratization were primarily rooted in the conviction in the unfinished project of democratic and pluralistic republicanism of the 1906 Constitutional Revolution in Iran (Mashruteh). The chapter clarifies the theoretical definitions of democracy and authoritarianism, vital background for understanding the story of political decentralization in Iran. Particularly important is the concept of “civil society” which was the animating concept for the reformists’ advocacy of elected local government (shura) as an embryonic democratic civil society institution. However, the reformists’ strategy was flawed in two respects. They failed to adequately grasp the contradictions inherent in the dual nature of local government as simultaneously part of civil society but also a branch of the governmental bureaucracy. At a time when many worldwide hoped decentralization would promote democratization in places like China and Iran, the reformists also underestimated the ability of their velayi opponents to employ decentralization to their own ends.