This article discusses the conflict in ideologies between centralized policies, influenced by City Beautification and top‐down comprehensive planning, and a local participatory approach taking account of multiple ethnic livelihoods, as played out at the municipal level of Mae Hong Son town. These conflicting, complex urban–rural ideologies and cultural mixes are sharply revealed in this small town’s first formal public participatory process conducted by the municipality for a proposed development along Nam Pu Creek to the north of the town. The process also publicly situated the debate on what defines a socially constructed ‘green’ planning policy for public open spaces, who decides and who benefits? The article argues that the participatory process opens up planning and resource management to more sustainable, democratic and equitable practices, mitigating the adverse effects of conflicts in urban landscape development between local government and the inhabitants.