This essay investigates the complex relationships between the decentralisation reform and implementation of the 1999 land laws in the rural areas of Tanzania. After critically reviewing the aims, content and early outcomes of the Local Government Reform Programme (LGRP), the essay considers the political implications of the neo‐liberal citizenship model the reform tries to promote at the local level, with a particular focus on its link with the implementation of the Village Land Act of 1999. Behind the rhetoric of poverty reduction and community development lies a government effort to promote a market model of citizenship in the rural areas. Indeed, the implementation of the LGRP and land tenure reform represent part of this broader effort. The paper concludes that these policies will have far‐reaching effects on resource access and democracy at the local level.