Historically, community development has been centrally concerned with democracy: in many contexts, its professional legitimacy has been justified by its strategic position as mediator in the relationship between the state and its citizens, through various forms of participation and community engagement. Whilst community development offers opportunities for extending and deepening democracy, such activity is always framed and regulated by the changing imperatives of policy. This has inevitably produced contradictions and tensions which, in turn, have framed the possibilities and constraints for practice. Negotiating these has always been a core challenge for practitioners. This article argues that contemporary community development, as both the agent and subject of modernization processes, has become seriously undermined in meeting this challenge. There is a danger that this leaves community workers stuck in the middle, as distinct from strategically positioned, between marketized state policy and democratic politics. The challenge for community development is how people can learn to be engaged – and, where necessary, to dissent – as actors in democratic politics in a context in which they are positioned as passive consumers, problematic objects of policy or resources for the diminishing welfare state. This will involve exposing the ways in which democracy is framed in policy and re-creating forms of purposeful practice that can act as a filter for sifting and sorting those values and practices which are in danger of erasing the democratic potential of community development.