The issue of local government financial autonomy, as undermined by the State Joint Local Government Account, is seen as greatest factor undermining that tier of government capacity to deliver services to the grass-root communities under its jurisdiction. The financial constraints and dependence on the State has provided groundfor the Local Governmentsabysmal performance, and further compounded by the poor administrative capacityto providing services for better social and economic conditions of the rural dwellers. The objective of this research is to assessing the capacity of local governments in Sokoto State and service delivery.The study examines the local Governments financial and administrative capacity and effect on provision of services to the communities‟ wellbeing and development in the State. The study hypothesized that there is relation between financial and administrative capacity of the local governments and provision of services in Sokoto State.The study used survey method to drawing samples from two main primary sources: Local government officials and the communities, using structured questionnaires. While secondary source of data consist records of revenue, expenditures, and services provided obtained largely from State Government and the LGCs sources. Hypotheses were tested using both qualitative and quantitative analysis, includingMean, Standard Deviation and Pearson Product Moment Correlation. Findings revealed that LGCsin Sokoto State heavily depended on statutory allocations from the federation accounts, have very poor IGRs and service delivery due to weak administrative andrevenue generation capacityas well as low quality leadership andpersonnel. Both the Local government officials and the communities generally agreed that the Local governments have notsignificantlycontributedto the provision of services,in line with constitutional responsibility, to their communities.The study recommended that the LGCs should have direct statutory allocation;empowered to improve on their IGRs; enhance their administrative capacity through leadership and personnel operational freedom,effective capacity buildingto enhancing their innovative contribution to providing quality service delivery, and personnel appointment, promotion and posting/deployment be based on merit; that local government financial autonomy should be with control mechanism for prudency through enabling State legislation.