Liberalism is one of the prominent ideologies of the present time. This study aims to explain the local governments’ reason of being within the context of freedom which is among the cardinal arguments of liberalism. The purpose of the study is to analyze the J.S. Mill’s position regarding local administrations by means of his thoughts within this framework and by probing into J.S. Mill’s understanding of freedom. In terms of maintaining the originality of the study, primary and secondary sources are both capitalized in interpreting the notions of J.S Mill. In the first part of the study, the classic liberalism approach will be taken into consideration and the prominent liberal thinkers’ approaches are also scrutinized. In the second part, liberalism’s point of view of concerning local administrations will be examined.