I so often get asked this question. As I'm in the early days of my PhD the answer has to be quite vague and rambling, as I'm just finding out myself. There are some things I am certain about. I know I am only interested in Greater London and I am only looking at community organisation below the borough council level.
The catalyst for my research is part four of the Local Government and Public Involvement in Health Act 2007 which extends the possibility of creating parish councils to Greater London and allows for new alternative names of "community" and "neighbourhood" council as well the existing "parish" and "town" alternatives.
Parish councils are essentially a rural solution to local governance. In their modern form they have existed since 1894 and were a way of ensuring rural communities had some control of local affairs, whilst other services were provided by district councils covering a much larger area. During the inter-war period of the 1920s and 30s all of the remaining parish councils in Greater London were abolished and in 1965 the creation of parish councils in London was explicitly prevented by law. Elsewhere in England parish councils were extended to towns who lost control of their own affairs in reforms of 1974.
They have traditionally been excluded from the major urban areas, but have started to resurface in the metropolitan counties and conurbations. According to the NALC, over 150 new parish and town councils have been created since 1997. The borough of Milton Keynes for example is completely divided up into parishes. Elsewhere, the creation of a parish council has been used to help pull an urban community together, such as New Frankley in Birmingham. One potential weakness of the application of parish councils to urban areas is that little has been done to amend the powers available to them. I wonder if the tool-kit of responsibilities is so limited in the urban context that community organisers fail to see the potential return on their investment in setting up a council.