The Heisei Era has witnessed major changes in the local autonomy system. Reforms introduced at the turn of the century to decentralize administrative powers altered the relationship between national and local governments from that of top-down subordination to cooperation between equals, thus giving prefectures and municipalities greater powers and responsibility. At the same time, the protracted economic doldrums following the collapse of the bubble boom from the late 1980s wreaked havoc on the finances of many smaller municipalities, forcing large numbers of them to merge with each other for survival. Now, as the Heisei Era is about to wrap up at the end of April, many of the depopulated municipalities are under increasing threat of demographic pressures and the continuing population exodus to Tokyo — to the point that maintaining local assemblies has become a challenge. A radical overhaul will be inevitable if the local autonomy system is to continue to exist.

In the large-scale wave of municipality mergers promoted by the national government from the late 1990s to the mid-2000s, the number of cities, towns and villages across the country shrank from around 3,200 to 1,800. Although the mergers were intended to make municipalities more fiscally stable and robust, the population flight from rural to big metropolitan areas such as greater Tokyo continued unabated, casting serious doubts about the future of those communities. A private think tank report in 2014 warned that nearly half of the municipalities across the country faced the risk of disappearing by as early as 2040 due to the depletion of young people.

That dire warning prompted the administration of Prime Minister Shinzo Abe to put regional revitalization high on its political agenda, pushing for policies to reverse the exodus to Tokyo by creating more jobs in regions outside the big metropolitan areas. However, such key steps as relocating national government functions out of Tokyo and encouraging firms to transfer their headquarters out of the capital have so far borne poor results.