This study explores the evolving landscape of local governance in the Republic of Azerbaijan since gaining independence from the Soviet Union. This study underscores the geopolitical importance of the Caucasus and Central Asia, examining the transformation of administrative frameworks within the region, with a particular focus on Azerbaijan’s distinct trajectory toward national sovereignty. The central aim of the research is to propose an effective model for local governance in Azerbaijan, distinct from Soviet-era approaches, and aligned with contemporary global standards. Through a comprehensive literature review, the study evaluates the existing local governance structure, implements reforms, and identifies areas requiring regulation and improvement. This study provides an in-depth analysis of local governance and reform challenges in Azerbaijan, focusing on the legal framework and practical implementation issues. The research delves into the constitutional provisions and practical aspects related to local governance, shedding light on the dynamics between municipalities and the central government. The examination covers the historical context, constitutional developments, and the impact of the Soviet legacy on Azerbaijan’s local governance. Therefore, the study reveals discrepancies between the constitutional framework and the actual practices, hindering the effective functioning of local governance. The findings of this study not only contribute to the understanding of Azerbaijan’s governance structure but also offer recommendations for enhancing the socio-economic progress of local administrations, emphasizing efficiency, accountability, transparency, and other crucial goals. The study adopts a broad historical perspective while focusing on recent developments in the field of local governance, ensuring a comprehensive analysis of the subject matter.