Regional development has become a matter of great interest to all stakeholders interested in development, because of growing regional disparities and the fact that poverty levels have remained very high, despite the various strategies adopted by successive governments since independence in Sri Lanka. Therefore, in regional development rural institutions have been regarded as vitally important mechanisms to achieve regional development . The Divisional Secretariat System and the Pradeshiya Sabhas are the two main rural institutions operating at the divisional level in Sri Lanka. This paper analyses people’s participations in decision-making and their involvement in contribution to regional development at the grassroot levels with special reference to Palagala division of the Anuradhapura District in the North Central Province in Sri Lanka. Analysis of data revealed that the achievement and the progress in people’s participations is poor and very limited despite the various attempts made over the two decades or more. The conclusion of the study is that the mere establishment of rural institutions is not the answer to the problems of peripheral development. It is equally important to identify the needs and the priorities of the people to have opportunities for them to play a stakeholder role in decision making.
