While change accelerates in rural conditions in the South, professionalism and bureaucracy are buffered against change. In their top‐down mode they produce and promote standard programmes, packages, and technologies. Rural development programmes in India for agriculture, canal irrigation, watershed development, and poverty alleviation illustrate how there is a mismatch between such standardisation and diverse needs and conditions. This mismatch is underperceived, and status at the cores is sustained, by misleading positive feedback from the peripheries. Falsely favourable impressions and information have five sources: misreporting; selected perception; misleading methods; diplomacy and prudence; and defences against dissonance. Error and myth among the development professions further aggravate the misfit between belief and reality. The costs of the resulting psychosis of the state are colossal. Therapy can be sought through policies and practices which empower poor people: reversals for local diversity; clarifying and communicating people’s rights; and personal choices by the powerful.