Development policy and practice is replete with assumptions that local “communities” have both the willingness and capability to adapt to socio-environmental changes and become “resilient” to multiple old and new challenges. This paper analyzes socio-environmental change processes in a dynamic peri-urban context in the Kathmandu Valley of Nepal, and argues that unequal power relations between diverse actors and their differing interests refute notions of “collective action” and “community resilience.” Residents of peri-urban communities are diverse, have varying abilities and interests, and use different strategies and actions in response to complex socio-environmental changes. These differences reduce insecurities for some while reproducing inequalities for others. These interrelations at the local level are driven by wider socio-economic, political, and institutional processes that transcend community boundaries, interests, and benefits. In the face of these complexities, “community resilience” is an unviable, externally defined, and engineered goal, often at odds with the power discrepancies and heterogeneity found within actual communities. These findings suggest a need to pay attention to the social, economic, and political dynamics of socio-environmental changes that simultaneously shape local communities and their members’ abilities to respond to changes at various scales.