The establishment of Local Action Groups (LAGs) within the framework of LEADER with the participation of public and private actors through a bottom–up approach (i.e., the empowerment of local society) and the management of local development strategies constitutes one of the major innovations in the field of rural policy in Spain. The protagonism of local society and the local management of development processes entail the introduction and experimentation of previously unknown mechanisms of territorial governance. However, the efficacy of this rhetoric has been seriously limited in its practical implementation, with difficulties conceiving truly integrated and multi-sectoral strategies, increasing bureaucratization and the progressive exhaustion of local actors. Yet the factor most responsible for slowing the progress of LAGs and LEADER has been the conception and use of them as clientelistic and power instruments by local and regional elites (mainly composed of public actors). Display omitted •LAGs play an important role in fostering economic development in rural areas in Spain.•LAGs have been able to foster many individual actions, but rarely comprehensive strategies.•LAGs are increasingly encouraging capacity-building, democracy, local empowerment and governance, and gaining legitimacy and leadership.•From LEADER Plus onwards, the exhaustion of stakeholders and an increased workload have hindered effectiveness.•From LEADER Plus onwards, many LAGs have become mere instruments of power and clientelism, thereby losing legitimacy.