The paper examines the progress made regarding the development of small irrigation dams in Malawi with the view of establishing their significance in improving rural livelihoods in the country. The paper adopts a political economy theory and a qualitative research approach. Evidence from Mzuzu ADD, where small reservoirs acquire specific relevance, shows that despite the efforts made, the development of small dams is making little progress. The paper highlights that problems of top-down planning, high investment costs, negligence of national and local interests, over-dependency on donors, and conflicts over the use of dams-- which made large-scale dams unpopular in the 1990s continue to affect the development of small irrigation dams in Malawi. The paper argues that small irrigation dams should not be simplistically seen as a panacea to the problems of large-scale irrigation dams. Like any other projects, small dams are historically and socially constructed through interests of different actors in the local settings, and can only succeed if actors, especially those from formal institutions, develop adaptive learning towards apparent conflicting relations that develop among them in the process of implementation. In the case of Mzuzu ADD, it was the failure of the government to develop this adaptive learning to the contestations and conflicts among these actors that undermined successful implementation of small irrigation dams. The paper recommends the need to consider local circumstances, politics, interests, rights and institutions when investing in small irrigation dams