South Africa has made the participation of communities and civil society in governance part of its project for post-apartheid transformation and development. However, this policy commitment has mirrored a decline of many once strong civil society organisations. Here this contradiction is investigated through an examination of residential civil society – street committees, civics and social movements – operating in the township of Guguletu outside Cape Town. It is found that whilst policy seeks to promote civil society empowerment it actually serves to undermine it. The fact that civil society is placed in a subordinate position in its relationship with political society and that political society dominates the distribution and administration of local government resources creates the possibility for patronage and ties many residents and civil society organisations to elected politicians, causing them to refrain from voicing discontent. This in turns leads to a demobilisation within civil society. An examination of incidences of protest and contentious political action in the township is used to further highlight the role of current policy in weakening the ability of civil society to provide citywide visions of development. The fact that participation is performed and resources distributed locally serves to fragment claim making and this inhibits the linking up of civil society and residents across the city as collective identities coalesce around narrow geographical spaces. The consequences of this for strategies of community participation are then considered and it is found that there are questions surrounding the extent to which participatory policy, as currently enacted, can realise the goals it sets for itself.