Understandings of participatory development require grounding—both in the sense that understandings of the principles must be held by local and international staff working on the ground, and also grounded in the local culture. This article provides documentation of a 10 month ethnographic study of an administrative decentralization support program in Cambodia (Seila), funded through multi-donor support, in order to examine the agency of local mid-level staff, asking: How do multiple environments interact to create local understandings of participation in international development environments? Five ‘socio-cognitive environments’ (SCE) surrounding the program environment were developed to disentangle the factors that influence how one group of local staff negotiates complex cultural and historical realities in juxtaposition to donor conceptualizations of development, providing new understanding of structural factors and other resources employed by embedded agents which promote local staff internalization of democratic governance principles. This study suggests that even in program environments with high degrees of cognitive dissonance due to macro-historical factors, and where international development mandates tend to create additional cultural and organizational blockages, micro-programmatic interactions can significantly influence the ability of local staff to surmount strong cognitive obstacles. Copyright © 2010 John Wiley & Sons, Ltd.