This chapter explores the contested notion of “literacy” as defined by the government and as negotiated by the grassroot literacy communities. By taking the case of post-authoritarian Indonesia, we propose to distinguish between “formal literacy” and “local literacies”. The former assumes an autonomous model of literacy located in formal schooling and organized formally by the government, whereas the latter views literacy as social practices at the grassroots level. Indonesia’s formal literacy performance, as measured by the OECD’s Program for International Student Assessment, remains staggeringly low, despite the claim of rising literacy rates. Critical literacies enable us to explain contradictory results of literacy performance and offers ways to liberate learners and educators from the excesses of authoritarianism.