For the past process of Taiwan's political and economic development, the state had extracted many resources from market and society in order to maintain its authoritarian regime. Due to strong public authority, the state could carry out its policy goals and thus had a high degree of state autonomy. The transformation of Taiwan's authoritarian political system until recently was followed by the falling of state autonomy. How to respond to this transformation is an important issue to public administration today.This article attempts to present the evolving relations among the state, market and society from some historical and theoretical point of views, and argues that a comprehensive and far-reaching administrative reform should consider the ongoing evolution of those relations. Finally, the author suggests that Taiwan should adopt a decentralization approach of administrative reform which can contribute to resolve some problems of the current situation.