Summary This article reflects on the challenges faced when the ideal of consensual communities is questioned. A more complex view of institutional relationships at the local level is envisaged, one which emphasises conflict as much as consensus. This, in turn, suggests some implications for institutional design and processes of conflict negotiation. A number of alternatives are explored, ranging from targeted, institutional design to more flexible, learning process approaches. Support for effective negotiation processes is highlighted, including the enhancement of claims‐making capacity through processes of participation and empowerment. Due to the inherent uncertainties in both ecological and social dynamics, institutional design can never take a blueprint form. Instead, a flexible, adaptive style of dealing with institutional complexity and uncertainty is envisaged. Despite the necessity of disagreggating ‘community’ imagery for local‐level implementation, such imagery can also be used strategically and effectively by local people and other development actors in struggles to define and direct processes of change. ancement of claims‐making capacity through processes of participation and empowerment. Due to the inherent uncertainties in both ecological and social dynamics, institutional design can never take a blueprint form. Instead, a flexible, adaptive style of dealing with institutional complexity and uncertainty is envisaged. Despite the necessity of disagreggating ‘community’ imagery for local‐level implementation, such imagery can also be used strategically and effectively by local people and other development actors in struggles to define and direct processes of change.