Municipal governments have introduced a new element to Nicaraguan politics that promises to substantially decentralize political power and influence. Established by the Law on Municipalities adopted by the Sandinista National Assembly in August 1988, the first municipal governments were selected in 1990. The municipal government structure with basic governing authority is the Municipal Council (Consejo Municipal). Under the provisions of the law, citizens vote directly for council members the number of these depends on the size of the cities. Once elected, council members select their own leader, the mayor, who serves with their approval.

Administratively, Nicaragua is divided into nine regions, which are subdivided into seventeen departments (fifteen full departments and two autonomous regions in the Caribbean lowlands that are treated as departments). In 1992 the country had 143 municipal units of varying sizes. Of the municipal units, fifteen were cities with populations estimated at more than 50,000 Managua, the capital city, was the largest, with an estimated 1.5 million inhabitants. Of the remaining municipal units, thirty were cities with populations estimated between 20,000 and 50,000, twenty-three were towns of 10,000 to 20,000 inhabitants, and seventy-two had fewer than 10,000 inhabitants. The number of council members is based on the number of inhabitants in 1992 Managua had the most, with twenty council members. Cities that are department capitals or have 20,000 or more in population have ten council members towns with fewer than 20,000 inhabitants have five.

The responsibilities and powers of the municipal governments and their method of conduct are based on constitutional provisions and on the 1988 Law on Municipalities. Article 176 of the constitution provides that the municipality is the "basic unit" of the administrative political divisions of the country. Article 177 provides that municipal authorities "enjoy autonomy without detriment to the faculties of the central government." The Law on Municipalities enumerates the responsibilities of the municipal government, specifies its taxing powers, and establishes rules for its functioning. Among the responsibilities are control of urban development use of the land, sanitation, rainwater drainage, and environmental protection construction and maintenance of roads, parks, sidewalks, plazas, bridges, recreational areas, and cemeteries verification of weights and measures and establishment of museums, libraries, and other cultural activities. As is true in the United States, the primary taxing power of municipal governments is assessment on property, including houses and vehicles.

Data as of December 1993