Democracy is widely regarded as an important institutional framework for promoting citizen participation, political accountability and development at the grassroots. However, the existence of democratic institutions does not automatically translate into effective governance or improved socioeconomic conditions. This paper conceptually examines the challenges confronting democratic governance in Nigeria and their implications for grassroots development. Using a qualitative desktop-analysis approach, the paper draws on scholarly literature, institutional reports and relevant contemporary evidence to examine democracy, grassroots development and the relationship between them. The analysis identifies neo-patrimonialism, electoral violence, political godfatherism, vote buying, weak adherence to constitutionalism and the rule of law, declining political trust, weaknesses in electoral administration, limited local government autonomy and deficiencies in accountability as major constraints on the developmental potential of Nigeria’s democracy. Although Nigeria has maintained uninterrupted civilian rule since 1999 and introduced important reforms, including the Electoral Act 2022, significant gaps remain between democratic institutions and developmental outcomes at the grassroots. The paper argues that democracy contributes meaningfully to grassroots development when electoral competition is credible, institutions are accountable, citizens participate beyond periodic elections, and local governments possess sufficient political and fiscal capacity to respond to community needs. It recommends stronger electoral accountability, protection of local government autonomy, civic education, institutional reforms and expanded mechanisms for citizen participation in local governance.