While India has made progress in achieving important health sector goals, there is still a long way to go. The Government of India has adopted decentralization or devolution with the objective of promoting greater equity and supporting people-centred, responsive health systems. We report on a study that problematizes the idea of strengthening health sector governance through decentralization and that explores the intersection of the political goal of enhanced local-level autonomy and the programmatic goal of more responsive health service delivery. The study examines the extent to which both political and programmatic decentralization are functional at the village level; looks at the design and objectives of decentralization at the village level; and considers whether sustained and supportive capacity building can create the necessary conditions for more genuine de facto decentralization and empowerment of village-level functionaries. Our methodology included semi-structured interviews with village-level functionaries in two districts of Karnataka, based on which we designed an Action Research to strengthen coordination and synergy between the functionaries responsible for political and programmatic decentralization. We found that both political and programmatic decentralization at the village level are at risk due to a lack of convergence between the political and programmatic arms of the government. This is substantially due to problems inherent in the design of the decentralization mechanism at the district level and below. Sustained capacity building can contribute to the more effective application of decentralization mechanisms, but systemic issues regarding the decentralization mechanisms need to be addressed alongside. We were also able to identify some spaces where coordination between village-level functionaries is possible, and the steps that need to be taken to build on this potential.