The word "centralization" came into use in France in 1794 as the post-French Revolution French Directory leadership created a new government structure. The word "decentralization" came into usage in the 1820s. "Centralization" entered written English in the first third of the 1800s; mentions of decentralization also first appear during those years. In the mid-1800s Tocqueville would write that the French Revolution began with "a push towards decentralization... in the end, an extension of centralization." In 1863 retired French bureaucrat Maurice Block wrote an article called “Decentralization” for a French journal which reviewed the dynamics of government and bureaucratic centralization and recent French efforts at decentralization of government functions.
Ideas of liberty and decentralization were carried to their logical conclusions during the 19th and 20th centuries by anti-state political activists calling themselves "anarchists", "libertarians," and even decentralists. Tocqueville was an advocate, writing: "Decentralization has, not only an administrative value, but also a civic dimension, since it increases the opportunities for citizens to take interest in public affairs; it makes them get accustomed to using freedom. And from the accumulation of these local, active, persnickety freedoms, is born the most efficient counterweight against the claims of the central government, even if it were supported by an impersonal, collective will." Pierre-Joseph Proudhon (1809–1865), influential anarchist theorist wrote: "All my economic ideas as developed over twenty-five years can be summed up in the words: agricultural-industrial federation. All my political ideas boil down to a similar formula: political federation or decentralization."
In early twentieth century America a response to the centralization of economic wealth and political power was a decentralist movement. It blamed large-scale industrial production for destroying middle class shop keepers and small manufacturers and promoted increased property ownership and a return to small scale living. The decentralist movement attracted Southern Agrarians like Robert Penn Warren, as well as journalist Herbert Agar. New Left and libertarian individuals who identified with social, economic, and often political decentralism through the ensuing years included Ralph Borsodi, Wendell Berry, Paul Goodman, Carl Oglesby, Karl Hess, Donald Livingston, Kirkpatrick Sale (author of Human Scale), Murray Bookchin, Dorothy Day, Senator Mark O. Hatfield, Mildred J. Loomis and Bill Kauffman.
Leopold Kohr, author of the 1957 book The Breakdown of Nations – known for its statement “Whenever something is wrong, something is too big” – was a major influence on E.F. Schumacher, author of the 1973 bestseller Small is Beautiful:Economics As If People Mattered . In the next few years a number of best-selling books promoted decentralization. Daniel Bell's The Coming of Post-Industrial Society discussed the need for decentralization and a “comprehensive overhaul of government structure to find the appropriate size and scope of units”, as well as the need to detach functions from current state boundaries, creating regions based on functions like water, transport, education and economics which might have “different ‘overlays’ on the map.” Alvin Toffler published Future Shock (1970) and The Third Wave (1980). Discussing the books in a later interview, Toffler said that industrial-style, centralized, top-down bureaucratic planning would be replaced by a more open, democratic, decentralized style which he called “anticipatory democracy.” Futurist John Naisbitt's 1982 book “Megatrends” was on The New York Times Best Seller list for more than two years and sold 14 million copies. Naisbitt’s book outlines 10 “megatrends”, the fifth of which is from centralization to decentralization. In 1996 David Osborne and Ted Gaebler had a best selling book Reinventing Government proposing decentralist public administration theories which became labeled the "New Public Management".
Stephen Cummings wrote that decentralization became a "revolutionary megatrend" in the 1980s. In 1983 Diana Conyers asked if decentralization was the "latest fashion" in development administration. Cornell University's project on Restructuring Local Government states that decentralization refers to the "global trend" of devolving responsibilities to regional or local governments. Robert J. Bennett's Decentralization, Intergovernmental Relations and Markets: Towards a Post-Welfare Agenda describes how after World War II governments pursued a centralized "welfarist" policy of entitlements which now has become a "post-welfare" policy of intergovernmental and market-based decentralization.
In 1983, "Decentralization" was identified as one of the "Ten Key Values" of the Green Movement in the United States.
According to a 1999 United Nations Development Programme report: