There are 1.5 billion people living in fragile states characterized by weak state capacity and/or weak state legitimacy. Many of these states experienced civil wars and are at greater risk of war recurrence than those that have not experienced armed conflict. These fragile states are left far behind in achieving the Millennium Development Goals (MDGs). State-building is considered as a key to overcome such fragility in post-conflict countries and conflict-prone societies. This article explores the effort to support governance in state-building with an example of local governance reforms undertaken in post-conflict Sierra Leone. It attempts to extract principle challenges for state-building in order to achieve MDGs in fragile states. Sierra Leone is a good example case that experienced local governance reforms in the post-conflict context. The article illustrates dual governance perceived in the area of capital city and rural areas in Sierra Leone, which are ruled distinctively during the colonial time. Thus, two areas, i.e. centre and rural areas, are under distinct governance in practice. This dual governance limits the broader effort for state-building by excluding particular social groups, such as youth, women and others, and thus constrains nation-building. It informs that one of the critical challenges in state-building is to grasp the existing local governance and modalities, which are the outcome of socio-political processes in history of the state. Therefore, it is necessary to understand how the current form and mode of governance have been transformed in its history. This understanding enables us to realize the limitation of outsiders' intervention in state-building for governance-related assistance while it convinces the necessity of breaking the existing practice of nepotism and undemocratic control by utilizing outsiders' involvement for state-building/peace-building.