The debate on whether governments are willing to translate decentralization theory into practice given the importance of natural resources as a source of livelihoods for local populations and a source of revenue generation for governments continue to yield varying outcomes. This study examines the decentralization process within a multidimensional framework of power with and power over, and systematically assesses outcomes of the exercise of power from both perspectives and their interrelations and implications on forest governance. In what some have lauded as an excellent attempt by the Kenyan government to transfer management of forests to community forest associations (CFAs), others have termed the process as a mere illusion. The results indicate that decentralization efforts offer a high transformational potential when power is exercised with others (co-operation and learning), rather than when exercised over others (coercion and manipulation). However, both power over and power with are not mutually exclusive in practice. To achieve an effective decentralized forest governance system, appropriate behavioural change among forest stakeholders is paramount. The challenge is how to define and transfer adequate and meaningful power to the local level actors and institutions to drive the required behavioural change.