The origins of NALAG can be traced to 2nd April 1962, where two separate associations (the National Association of Local Councils and the Association of City/Municipal Councils) existed to serve the interest of rural and urban councils in Ghana. On 18th November 1977 the two Associations realizing that there was a similarity in their objectives and that they were performing similar and duplicating roles, merged to form the National Association of Local Councils (NALCO) as an apolitical organization without religious or philosophical pre-occupation or orientation.

Following the restructuring of the system of local government in Ghana in 1988 by the government of Ghana, and in tune with an international designation of Local Governments, NALCO became NALAG – National Association of Local Authorities of Ghana.

NALAG continued to receive government subvention until 1998 when the Association voluntarily decided to opt out of it to give it the independence and autonomy to play its roles more effectively.