This paper attempts to describe the theoretical issue of what is referred to as “Kankou-Machizukuri” or community development tourism. Since the 1990s, tourism and community development in Japan have become more interconnected and are thought to have a mutual beneficial effect. Why does community development provide advantages to tourism and vice-versa? That is the theoretical issue in Kankou-Machizukuri. Community development creates uniqueness of the community and a new framework in social relationships, which shapes competitive advantages through the “branding” of the community and “innovation” of tourism.