The innovation of e-governance enhances good governance, strengthens the democratic process, facilitates access to information, improves citizen participation and the quality of life, using the instrument of Information and Communications Technology (ICT). There is growing concern that e-governance at the local government level can: improve the quality of services to its constituents, improve efficiency, effectiveness, transparency of government operations, build the capacity of civil society to participate in the government policy, reduce corruption and foster accountability. This paper discusses the concept, benefits, state and challenges of e-governance in developing countries, using the empirical analysis of a local government in Ogun State, Nigeria. Findings show that there is real need for harvesting the potential to streamline administrative systems and improve the delivery of government services. It concludes that although e-governance holds great prospects across Nigeria, vast majority of local governments in Nigeria are miles away from e-governance and recommends, amongst others, that local governments should be mandated under law to use electronic means in their operations