In light of increasing legitimacy issues and governance deficits during times of financial and economic crises, Japan has been undergoing a fundamental transformation in the relationship between the central government and municipalities for over a decade, moving towards a more equal partnership. The local level is emerging as a crucial cooperation platform between citizens and the state. This change is accompanied by a new recognition of citizens as political subjects; through new modes of participation and cooperation, they become "partners" of the administration in local politics. This study empirically examines the new citizen-state relationship at the municipal level by integrating the previously mostly separately discussed approaches of governance and civil society, focusing on new forms of cooperation as well as their frameworks, conflict lines, and action restrictions.