This chapter reviews the literature on natural resource decentralization with an emphasis on forests in developing countries. This literature can be located at the intersection between discussions of good governance and democracy, development, and poverty alleviation, on the one hand, and common property resources, community-based resource management, and local resource rights, on the other. Policies implemented in the name of decentralization, however, are often not applied in ways compatible with the democratic potential with which decentralization is conceived, and only rarely have they resulted in pro-poor outcomes or challenged underlying structures of inequity. Greater attention to who receives decentralized powers, the role of property rights, the notion of “the local,” and the meeting of expert and local knowledge provides insights into key issues and contradictions. Fundamental differences in conceptions of democracy, participation, and development lie behind these contradictions and shape strategies for the redistribution of access to political power and resources, which is implied by decentralization.