Under the "Local Authorities Act 1902" all Divisions were reconstituted as Shires, and the Mckinlay Divisional Board became the Mckinlay Shire Council on 31 Mar 1903. On 26 Jul 1930 the Shire was abolished and re-constituted from parts of Cloncurry, McKinlay, Winton and Wyangerie Shires.
Under the "Local Authorities Act 1902", the primary function of Shire Councils was to provide such public services and amenities as roads and bridges and street lighting; water, sanitation and drainage; public health services; parks and reserves, cemeteries, libraries and recreational facilities; etc.
Council also had powers in relation to the construction of buildings, fire prevention, public nuisances, places of amusement, public carriers, slaughter houses, markets, animals and traffic. Increased powers were given to Council by subsequent local government legislation, for example, in the areas of public health, building regulation, town planning and the environment, public utilities and business undertakings.
The Council was also responsible for administering the Local Fund, and until 1944, for valuing properties within the Shire for the purpose of determining and collecting rates, which together with endowments and loans formed its revenue base. The general powers of Council were exercised through the passing of by-laws approved by Governor-in-Council.
Local Government Councils under the “Local Government Act 1993” and through local laws: promote economic development; own and manage public infrastructure including roads and public works, sewerage, and water storage and distribution; regulate activities which affect the environment including air, noise and water quality, land use and waste disposal, pests and noxious weeds, and building control; provide community services including recreational and cultural facilities and public health services.
Councils generate revenue from rates, service charges, grants and subsidies from state and federal governments, and loans for major projects.
The Shire was governed by a rate-payer elected council comprising a chairman and councillors. Under the "Local Government Act 1993", the title Chairman was replaced by Mayor. Special or general purpose committees were appointed reporting to Council. Council appointed its own officers to administer its business, headed by a Shire Clerk/Chief Executive Officer.
On 15 March 2008, McKinlay Shire is undivided and the Council is comprised of 5 councillors including the mayor.