Democracy is today the most fashionable system of government the world over. This is because of its avowed commitment to democratic ethos of participation on the part of the people and accountability to the people by the elected leaders. This paper examines in a historical and analytical manner how wanton corruption in a polity can engender legitimacy crisis and in turn vitiates democratic efforts. It argues that the nature of the formation of the state and in particular the amalgamation of 1914 smacks of the fundamental corruption as the bane of Nigeria’s legitimacy crisis before and indeed under the Obasanjo administration. It concludes that there is the need to fundamentally restructure Nigeria along the spirit and letters of federalism. Unless this is done successive regimes in Nigeria cannot escape the challenges of legitimation. Key Words: Democracy, Corruption, Legitimation, Legitimacy Crisis.