Towns are crucial catalysts of development particularly, for developing countries like Ethiopia. As noted by (Rondinelli,1983), towns and small cities become essential nodes of trade and commerce in a larger network of market centers that provide more diversified and higher order goods and services. Beyond this, they serve as the links in the system of distribution and exchange between agricultural areas and urban centers. Thus, for achieving of development, empowering of town is crucial.Decentralized governance offers opportunities for achieving development through good governance and community participation at grass root level. It can support development by encouraging transparency and accountability, building of local participation in public decision making processes, empowering of communities and increasing their sense of belongingness(Mehert, 2007).