The concept of “local governance”developed in the western democratic tradition is based on the central idea of the division of power within the framework of multiple sovereignties. The development from “centralized rule” to “local governance” represents a revision of the traditional concept of the absolute authority of national sovereignty, and the acceptance of the sharing of power. The idea of “local governance” hasalso ignited heated debates in totalitarian China. China’s “local governance,” however, is radically different from that of the West. The Western concept of the division of power, born of the concept of democracy, has brought about the change from “ruling” to “governance.”But in China, lacking democracy, “local governance” is used by local governments as a slogan or theoretical underpinning for regionalism or challenge against the central authorities. Thus in Mainland China, “local governance” is, on the one hand, an expression of local governments wrestling with the central government for power sharing, and, on the other, an embodiment of grass-roots units fighting with the local government for power. In other words, through the creation and interpretation of a discourse of local governance, political participation in Mainland China has been extended. The power play between the central authorities, the local governments and the civil society will be examined in the light of this discourse. Through a study of the development of the Zhejiang model, this paper discusses the roles and actions of the various levels of Zhejiang’s local governments in the development of the province. The paper also offers speculations on the problem of how Mainland China, under the unitary authoritarian system of the totalitarian central government, goes about building a workable “local governance”which is based on the division of power. How legitimate and how rational is this, indeed, in the Chinese context? In other words, the paper attempts to clarify how Mainland China’s local governments, through the construction, interpretation and application of a discourse of “local governance,”achieve a degree of balance between totalitarian rule and political participation, and, as a result, are able to benefit themselves and maintain their own existence and developmental advantage in the dialectic of the central government’sauthoritarian rule and the emergence of a civil society. These are issues that this paper seeks to shed light on through a study of the Zhejiang model.