The Dillon Rule, which is also known as the rule of statutory construction, is a legal principle that stipulates that local governments only have powers that are expressly granted to them by their state legislature.
The localities are granted 3 powers only
“those granted in express words”
“those necessarily or fairly implied in or incident to the powers expressly granted
“those essential to the accomplishment of the declared objects and purposes of the corporation, --not simply convenient, but indispensable”
If there is any question of a locality have any additional powers or authority other than those listed above, then the courts are to unquestionably determine that the state has the power and authority and not the locality. This forceful and preemptive clarification of the Dillon Rule is known as the Rule of Local Government Powers.
Full text of the statement by Judge Dillon from which the "Dillon Rule" was derived
“Extent of Power; Limitations; Canons of Construction. -- It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers, and no others: First, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the accomplishment of the declared objects and purposes of the corporation, --not simply convenient, but indispensable. Any fair, reasonable, substantial doubt concerning the existence of power is resolved by the courts against the corporation, and the power is denied. Of every municipal corporation the charter or statute by which it is created is its organic act. Neither the corporation nor its officers can do any act, or make any contract, or incur any liability, not authorized thereby, or by some legislative act applicable thereto. All acts beyond the scope of the powers granted are void. Much less can any power be exercised, or any act done, which is forbidden by charter or statute. These principles are of transcendent importance, and lie at the foundation of the law of municipal corporations.”
Excerpt from Commentaries on the Law of Municipal Corporations by John Forrest Dillon, LL.D. Volume I of V 5th Edition 1911 that laid the foundation for the development of what has become known as the Dillon rule.