The concepts of participation and empowerment are widely used in both development theory and in tourism development that includes the local community in its considerations. The concepts are either accepted without question in the tourism development discourse as essential elements of community-based tourism (CBT) which brings community control, sustainability and the equal distribution of benefits to a community, or they are dismissed as obstacles to the most efficient way of bringing benefits such as employment, income and efficient development through community benefit tourism initiatives (CBTI). This research has explored the complexities of participation, empowerment and external actor involvement in community-centered tourism in rural Nicaragua and found that these both form the basis of and are the result of the internal and external power structures that form a crucial part of the modern, heterogeneous community. With research based on the case study of San Juan de Nicaragua, where a locally based tour operator is under development, we suggest for tourism researchers to create stronger cross-disciplinary ties to development theory scholars who have long concerned themselves with the challenges inherent in these two concepts. In doing so it may be possible to look beyond the discussion of whether or not to include community members in participation and empowerment and instead realise that the two approaches might have more in common than what divides them. Namely the concepts that form the core of their very definition and presumed opposition to each other and the fact that they are united in the common challenge of applying them in more nuanced ways. Furthermore the role of the external actor involved in developing this local tourism initiative was found to be of great significance to the tourism development in the community. In particular it was found that external actors, when engaged in community-centered tourism, have the potential to either assist the community greatly through the resources they contribute or to cause detriment to the community when local knowledge is dismissed and the internal power structures ignored.