This chapter begins Part III by examining the second theme of this book – the interactions between state and society, mediated by the local governments at the county and township levels. The three chapters to follow look at different episodes at the grass-roots level: (1) public goods provision for a road pavement project in two villages, (2) village elections in a township, and (3) collective action based on unorganized interests on the national scene. These episodes allow us to take a close look at patterns of interactions among state policies, local governments, and villagers, and to make sense of the underlying institutional logic of governance at the grass-roots level. I begin with the road pavement public project in an agricultural township in northern China in the mid-2000s.