To reconstruct the grassroots society in cities, the government has initiated the community-building projects and the democratic reform of the management system of neighborhoods in China. The management system affects the power relationships among the actors in the field of neighborhood politics, and in addition, its transformation should be an unfolding process of imposed institutional change. Therefore, the inherent law of institutional change must bring about requirement for reconstructing the relationship between the management system and the power structure of neighborhoods. However, where present ‘democratic’ reform of residents’ committees is concerned, it is still controlled by the government instead of residents. Due to the path dependence, local governmental agencies ‘fix’ the domination relations between them and residents’ committees, and community governance cannot break away from the ‘lock-in’ impasse. For the institutional restrections of urban administrative system, it is difficult to realize grassroots democratization in present day.