Abstract: In the rapid process of urbanization, the "village-in-city", which is the unique local phenomenon, appeared in our country. At present, city competitiveness is more and more measured by the GDP. Both in understanding and practice, the demolition movements are presented in order to realize the end of "village-in-city". But, in specific operations, it falls into the trap of governance dilemma. Based on the background of urban modernization, the article analyses the current governance dilemma and proposes ideas and ways of realization of orderly "village in city" governance.