This study examined Local Government Administration in Nigeria: Prospects and Challenges using a historical research design supported by content analysis of relevant secondary sources, including textbooks, journal articles, policy documents, and constitutional provisions. The study was anchored on the need to critically assess the evolution, performance, and constraints of local government administration in Nigeria within the context of decentralization and grassroots development. Findings revealed that local government administration in Nigeria has undergone significant historical transformations, particularly from the colonial era through the 1976 Local Government Reform and the 1999 Constitution, which formally recognized it as the third tier of government. Despite these developments, the system has continued to face persistent challenges such as financial dependence, political interference from state governments, corruption, weak administrative capacity, and inadequate citizen participation. The study also identified emerging prospects, including democratic deepening, improved service delivery through decentralization reforms, increased civic engagement, and the adoption of digital governance tools. It concluded that although local governments in Nigeria possess strong potential for grassroots development and democratic consolidation, their effectiveness remains constrained by structural and institutional weaknesses. The study recommended, among others, that the Federal Government should ensure genuine financial and administrative autonomy for local governments by enforcing constitutional provisions and reducing undue interference from state governments. This will enable local councils to manage their resources effectively and deliver development projects efficiently.