In the period since the signing of the Ohrid Agreement in 2001, the political and security agenda in Macedonia has been dominated by the need to implement the major principles of this accord to ensure the survival of the state. For Albanian political parties decentralisation was an important part of the Ohrid Agreement, because NLA acknowledged the territorial integrity of the Republic of Macedonia in exchange for more authority over "Albanian" territory. Especially in the fields of education, culture, securityand taxes. For them, it was mainly an ethic issue. On the other hand, decentralisation would bridge the gap between the government and the citizens, because before 2001 Macedonia had a highly centralised administration. Decentralisation would give municipalities more power and strenghten democracy. This article looks at the factors leading to call in 2004 for a referendum against the new municipal boundaries in Macedonia and highlight some of the main challenges in the process of decentralisation in government in the Republic of Macedonia after the signing of the Ohrid Agreement.