A decentralized local government system in South Africa's rural areas has the potential to wtlock many of the institutional impediments to rural development which existed during the apartheid period This paper outlines some of the problems associated with previous systems of rural administration, and suggest how a decentralized local government system might be expected to overcome some of these problems. The final section discusses of some of the shortcomings of local government transition process in rural areas in the run up to the elections and its implications for the future.