This essay examines Nicaragua’s municipal elections of November, 2008 against the backdrop of Daniel Ortega’s return to the nation’s presidency in 2006. While Ortega has engaged in authoritarian practices, municipal-level Sandinista politicians have helped foster a vibrant local democracy. Engaging citizens in local problem-solving, they have dominated municipal elections since 2001, winning most major municipalities again in 2008. Sandinista success has pushed Liberals toward a more policy-oriented versus clientelistic approach to local government and generated a more responsive and competitive municipal politics nation-wide. These developments, contrasted with Ortega’s behavior, indicate that Nicaragua is experiencing progressive and regressive forces in its democratization process.