THE CROWD OF 1,500 ON THE steps of the District Building shivered in a wintry breeze. After the ceremony, a 9-year-old from F.S. Key Elementary School was asked what he'd learned. His answer: "I learned we have a new government."

It was Jan. 2, 1975, and the first elected mayor and City Council of the District of Columbia in more than a century had been sworn in. Washington was heady with the smell of democracy.

A decade later, the city and its government have greatly changed. There's a subway now, a new Old Post Office and a newer "old downtown," the long-awaited Washington Convention Center and a passel of sleek new Squares -- Washington, International and Metropolitan, to name three -- with awnings, atria and arcades of fancy shops.

Gentrification has invaded places like Capitol Hill and Shaw. But there has also been decay in some areas, especially in public-housing projects like ill-named Valley Green in far Southeast.

The fledgling city government has grown up. There's a real political system now, spread throughout the city's eight wards. The city cuts deals with developers, floats bond issues, regulates services -- it acts like a real city. And it has a real city's problems.

This week, The Washington Post looks at the city and its government, and how both have fared in home rule's first decade.