The impact of climate change has become apparent in rural lives in developing countries like Nepal. There is a growing realisation that local institutions have an important role to play in adaptation to climate change. This paper examines the role of community groups in adaptation and the issues and challenges related to local-level adaptation planning. It argues that local adaptation planning can benefit from the experience and institutional base of diverse community groups, but they should be coordinated by the local government at village level (Village Development Committee or VDC). Field research conducted in Lamatar VDC of Lalitpur district, using different qualitative research tools, suggests that the activities of diverse community groups working within the VDC do contribute to adaptation, but these activities are not coordinated to form an effective local adaptation plan at VDC level. The VDC, as a government unit that is closest to the people, could bring community-based organizations (CBOs) together and coordinate their activities to form local adaptation plans. The CBOs, including community forest user groups (CFUGs), can offer an institutional base for planning and implementation of adaptation activities. However, they face several challenges, such as limited capacity of VDC, absence of elected local government and lack of clarity of policy. It requires clarifying the role of community groups and local government in policies related to adaptation and developing capacity of local government to coordinate the activities of community groups and provide leadership in local adaptation planning. As election to the local government is uncertain, there is need for an interim strategy for an accountable decision-making mechanism in local government.