In Nigeria, the philosophy of people’s participation in community development is increasingly gaining acceptance as an important instrument for mobilizing resources and organizing the rural populace to have cogent interests in providing for their well being. Government at various levels such as the federal state and local government have come to terms with the fact that there is an inherent imperative in ‘Democratic Village Republic” which advocates Town Union’s active participation in the decision making and implementation of policies that affects and shapes their lives. In view of the above, this study interrogates the following questions Have Town Unions acted as major instrument for community development in Nsukka Local Government Area? Does inadequate finance impede Town Unions from achieving their goals of community development? Does financial mismanagement pose constraint on the ability of the Town Unions to achieve community development? The study utilized survey method through self report technique of data collection which deals mostly with sourcing information from the primary sources and analytical induction sourcing information from secondary sources. Data collected were analyzed using quantitative methods. We discovered that Town Unions are real authorities in their various communities and have contributed to community development. We also discovered that inadequate finance has impeded Town Unions in Nsukka Local Government Area from achieving their goals of community development. Financial mismanagement was discovered as constraint and ability of Town Unions in achieving community development. We therefore recommended that First, the State and Local Government should incorporate the Town Unions in their decision making process and implementation. Secondly, Government at various levels should evolve a well-conditioned policy of direct financial assistance to Town Unions’ for their Community development projects. Thirdly, Town Union leaders should be judicious in their use of funds collected for development.