This article presents an overview of the historical foundation and evolution of the system of local government and the notion of developmental local government in South Africa. This analysis covers the period prior to and post the 1994 democratic breakthrough. Related to this analysis is a reflection on the evolving policy development process that shaped the new local government dispensation informed by pieces of legislation, and policies inter alia the Local Government Transition Act, 1993 the Constitution of the Republic of South Africa, 1996, White Paper on Local Government, 1998, the Local Government: Municipal Systems Act, 2000 a nd the Local Government: Municipal Structures Act, 1998. The notion of developmental local government is succinctly described within the context of local economic development. Thus various reasons for undertaking local economic development by municipalities are advanced as well as the dimensions and mechanisms needed to realise local economic development objectives.