Subsidiarity holds that issues should be dealt with at the most immediate (or local) level that is consistent with their resolution.
It is the principle that any more centraled authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level.
The idea of subsidiarity can be applied to social organizations, as well as to the architecture of technologies.
Subsidiarity is considered to increase:
Subsidiarity is a fairly common principle in various forms of community organizing, especially those with an 'anarchist' or 'anti-authoritarian' bent.
Note that for a large organization consisting of many local 'chapters', some processes are more efficiently done in a 'centralized' fashion. Scenarios requiring rapid, coordinated action across a large collection of entities seem easier to accomplish with a centralized authority in a 'command and control' mode.
This observation would provide a challenge to a 'local only' philosophy; but subsidiarity -- which essentially can be taken to promote "as much decentralization as is useful" -- can easily accomodate this challenge.
A concrete example might be a group of friends sailing together on a sailboat. The group of friends may have no persistent set roles or hierarchical structure in most of their daily interactions; but on a given afternoon, in a storm, they might all collectively decide to assume particular roles, and a particular (temporary) hierarchy -- from 'captain' to 'cook'; roles which increase their efficiency for that afternoon, and which can be abandoned or reassigned the next morning.
A note on the use of decentralization by centralized authorities. We should note that subsidiarity can sometimes be seen to benefit centralized authorities. Certain forms of value cannot easily be captured without a minimal infrastructure established locally; centralized value flows can sometimes be made more efficient by performing tasks at the edge; and certain costs can be mitigated by pushing them out to the boundary. For example, it has become quite common for under-resourced state authorities in the United States to seek to push some of the purported duties of the state out onto the citizenry. Thus, even monopolies and central authorities sometimes promote certain forms of subsidiarity.