Decentralization is considered a potentially effective strategy for participatory development and delivery of assistance, particularly in the context of rural development. It contributes to the reduction of inequality and poverty and, thus, promotes local democracy. India has considerable social and economic inequality and poverty. Success stories of several Indian states indicate that India is better able to make democratic decentralization works well than most other countries. This is true because India can offer several helpful preconditions like the long prior experience of democracy, a well-developed capacity to conduct free and fair elections, extensive experience of bureaucrats yielding some influence to elected representatives etc. Although the democratic decentralization has yen number of challenges in India, There are two main strands to the Indian story: remarkable achievements in a few states, and missed opportunities in most. Most state governments have denied elected councils both (urban and rural) sufficient powers and resources to enable them to work well. This paper examines the role of democratic decentralization in promoting inclusive governance like responsive, efficient, equitable and social security in the context of globalization.