Since the 1980's, participatory development has been a key term in the development paradigm. Considering the diversity of developing countries, development programs need the involvement of local people to be sustainable. Indigenous organizations can be important bridges for mutual understanding between local beneficiaries and the developing partners. The objective of this study is to determine the roles of local organizations by examining some activities of development organizations introduced by development partners, namely the United Nations Development Programme, the government of Nepal, NGO's, and indigenous organizations are grassroots associations built on the principles of cooperation and organized group work in a mountain area of Nepal. Comparison of two types of villages, a tourist village and an agricultural village, indicated that the activities of development organizations have some limitations for community development. People benefited from the development organizations by gaining useful experiences in their management and socio-economic activities, but the most organizations are not sustainable. They might not match local needs because they are managed by non-local people mainly. In one of the indigenous organizations in the tourist village people started a financial system similar to the Rotating Saving Association. On other words, they could adapt new system to their own organization where are stocks of their know-how of management. It is more important that indigenous organizations play significant roles in their sustainable development.