Governmental power in West Virginia is constitutionally located in the state, with counties and municipalities having no inherent right of self-government. In the interest of efficiency, however, some responsibilities have been delegated to local units of government. This delegation of governing authority from the state to local units of government is referred to as home rule.

Counties and municipalities are the most important units of local government. They exist side by side, but with little legal relations with each other, except for cooperation on state-authorized common projects. Over the years, the legislature has gradually bestowed broader powers on local governments, although their ability to tax remains greatly restricted. Generally, the legislature has conferred more powers on counties than on municipal governments. For example, counties and county school boards control property tax assessments. Still, West Virginia's home rule provisions are very restrictive. Local governments are not allowed to expand the limited taxing powers they have been given, nor are creative attempts to control crime or undertake environmental plans allowed.

Large municipalities are incorporated entities whose charters outline their governmental structure and available powers. All municipalities can own and control property, appropriate funds, and protect the health and welfare of their citizens according to their charter. The 1936 Home Rule Amendment to the state constitution provided that municipalities may adopt their own charters, consistent with state law. Prior to that only the legislature could enact such charters. In 1969, the legislature enacted a new Municipal Code that modernized regulation of cities and towns.