Capacity building (or capacity development) is the process by which individual and organizations obtain, improve, and retain the skills and knowledge needed to do their jobs competently. Capacity building and capacity development are often used interchangeably; however, some people interpret capacity building as not recognizing people's existing capacity whereas capacity development recognizes existing capacities which require improvement.
Community capacity building is a conceptual approach to social, behavioral change and leads to infrastructure development in case of water and sanitation that focuses on understanding the obstacles that inhibit people, governments, international organizations and non-governmental organizations from realizing their development goals while enhancing the abilities that will allow them to achieve measurable and sustainable results.
The term community capacity building emerged in the lexicon of international development during the 1990s. Today, "community capacity building" is included in the programs of most international organizations that work in development, the World Bank, the United Nations and non-governmental organizations (NGOs) like Oxfam International. Wide use of the term has resulted in controversy over its true meaning.
Community capacity building often refers to strengthening the skills, competencies and abilities of people and communities in developing societies so they can overcome the causes of their exclusion and suffering. Organizational capacity building is used by NGOs & Governments to guide their internal development and activities.