The term decentralization means different things for different people and hence, severalrnunderstandings are being usedfor the same term but nOne of the understandings offers comprehensiverntheoretical or methodological solutions that will help us determine how decentralization should berncarried out. However, the different approaches provide important concepts 'and guidelines forrndetermining and implementing decentralization policies as a strategy for development.rnDecentralization is understood to mean a good many things and as a result most governmentsrnlike the idea of decentralization. However, most governments have not been successful in carrying outrndecentralization policies. Decentralization is believed to improve development activities by allowingrnlower levels of government agencies and the people at large in development planning andrnimplementation. But these objectives have not been fidly achieved by many governments since thernimportant preconditions such as political commitment, availability and access to resources, capacityrnof implementing agencies, effective inter-organizational relations, and supplementary supports are notrneffectively fidfilled.rnThe on-going decentralization policy in Ethiopia has introduced a major change in thernpolitical, economic and social systems of the country. The new decentralization policy is organizedrnunder federal fornJ of government whereby the cOL/nlly has been divided into nine regional gove0lnenJLrnand t~ regiona~ administrations under the umbrella of the Federal Government. The regions arerndelimited based Oil ethnic and language factors. As a result, the emerging regions are different inrnpopulation, area, and economic and social infraSIn/cture.rnAlthough authority and powers seem to be decentralizedjrom the center to regional levels, thernextent of decentralization to sub-regional units of government is not satisfactory. Moreover, the currentrndecentralization is challenged by many problems such as low revenue bases for regional governments,rnvelY low administrative and manpower capacity both at the federal and regionallevels,-and poor interorganizationalrnrelationships.rnThe policy of current decentralization aims at promoting balanced regional development.rnHowever, the trend is not as it was thought to be, rather it aggravates regional development differences.rnSome regions like Tigray, Amhara, Oromia and SNNP are doing good whereas regiollS like Afar,rnBenishangul/Gwnuez, Somali and Gambella are lagging behind the former regions.