This study examines the policy and institutional foundations of decentralisation in Sierra Leone, focusing on the relationship between district councils and chiefdom councils. It finds that despite successive decentralisation reforms, the role of Chiefdom Councils remains poorly defined, resulting in overlapping responsibilities, weak coordination, and ineffective implementation of the principle of subsidiarity. Using Critical Realism and qualitative policy analysis, the study reviews the historical evolution of decentralised governance and analyses the Local Government Acts of 2004 and 2022 together with the National Decentralisation Policies of 2010 and 2021. The findings reveal that while district councils are legally recognised as the primary local government authorities, chiefdom councils continue to perform important governance functions without adequate legal authority or institutional integration. The study concludes that sustainable decentralisation requires constitutional and legislative reforms to clarify institutional roles, strengthen collaboration between local governance institutions, and formally integrate chiefdom councils into Sierra Leone's decentralised governance framework while maintaining democratic accountability.