Municipalities were once controlled and used by Israel as a means of administering its occupation until the formation of the Palestinian Authority (PA) in 1994. Prior to the establishment of the PA, Israel created what was known as the “Village Leagues” to administer the OPT through proxies. Leaders and members of these groups were largely seen as traitors by the Palestinian population and became a target for assassinations during the First Intifada.

After the PA’s establishment, municipal elections became a significant arena for Palestinian political development. Municipal elections were held in 2004-05 in both the West Bank and Gaza – the first since 1976, and the first under the PA. Voting mostly followed party lines, but in some cases family and tribal relations also played a role. The second municipal elections were held only in the West Bank in 2012 without Hamas participation. The third municipal elections in 2017 – again held exclusively in the West Bank – saw lower participation and a shift away from factional politics. They highlighted internal divisions within Palestinian politics given the non-participation of Palestinian factions such as Hamas, the Popular Front for the Liberation of Palestine (PFLP), and Fatah-aligned supporters of Mohammed Dahlan.

Hamas boycotted PA elections until 2005, when it participated and had great success in that year's municipal elections. But Hamas boycotted the 2017 municipal elections after the Supreme Court ruled that the Hamas-backed court system in Gaza did not have jurisdiction to rule on electoral matters – a crucial element in ensuring Hamas buy-in and prompting accusations that Abbas had ignored agreements reached by Palestinian factions in Beirut in January 2017.

There are 121 Palestinian municipalities: 96 in the West Bank, and 25 in Gaza.