In the article, key challenges and problems that arose during the implementation of local self-government reform and financial decentralization in Ukraine were analyzed and systematized, in particular: poor communication between government and citizens; inconsistent power sharing between local self-government bodies and executive bodies as well as between councils of the united territorial communities and district state administrations and district councils; ensuring the capacity of formed communities; low quality of local government staff; inefficient use of financial resources. Factors that were behind the resistance of local communities to reform or a passive attitude to the creation of united territorial communities were identified and studied, namely: economic (expectations of reduced financial capacity of the community due to unification), socio-cultural (ethnic, linguistic, religious, cultural differences between residents of neighboring communities), psychological (distrust of central and local government, fear of reduction of social facilities, decline and disappearance of peripheral villages and towns, strengthening local elites), geographical (deterioration of access to service centers), and environmental (efforts of community residents to avoid the transfer of harmful industries to their own territory). The geographical unevenness of the pace of the process of unification of territorial communities in the course of decentralization has been associated with the position of political actors at different levels − central, regional, subregional and local. According to the type of attitude of the regional leadership to decentralization, three groups of regions were identified: those supporting the reform, and those who passively or actively resisted the change. The main reasons and forms of resistance of district councils and district state administrations to the decentralization reform have been clarified, the motives of actions of local political actors explained. Key words: decentralization, local self-government, local self-government bodies, united territorial community, social crisis.