The question, is it possible to preserve the territorial integrity of a multi-ethnic state by devolving responsibilities to municipalities, is the main puzzle of this work. Republic of North Macedonia was established in 1991 with a sharp legitimacy problem. It was challenged both from outside by neighboring Greece and Bulgaria, and from inside by its minority communities. The country’s existential insecurity had a significant impact on determining the format of relations between the ethnic Macedonian-dominated state and its minority communities. Notable inequalities experienced by the minority communities led to the mobilization of Albanian insurgents against the state in the following decade. The internal conflict ended only with international pressure and by the signing of the Ohrid Framework Agreement in 2001. The ultimate goal of the Framework Agreement was to accommodate the grievances of the Albanian community by decentralizing to the local level. Decentralisation and the Management of Ethnic Conflict, by Aisling Lyon, offers an analysis of local government decentralization as a potential approach for the management of ethnic conflicts. Lyon focuses on political, cultural, social and economic inequalities and asks if decentralization, which is the process of the transfer of competences from the central to the local level, can be an answer to them. Other forms of territorial self-government arrangements, namely federalism, autonomy and devolution are not the focus of this work.