Yilan County has developed an image as a place that is clean and wholesome and that has a recognizable local culture. This has shaped the factors that have allowed the residents of Yilan to reach a high level of identification with their local culture. Yilan County’s characteristics were mostly formed by the local conditions and forward-looking political policies. One of the county’s most successful annual events is the Yilan International Children’s Folklore & Folkgame Festival. However, many problems associated with this festival have emerged. Most are known only by a few people and have been neglected, such as the struggle between government and civilians, the definition of local boundaries, the recognition of local qualities and so on. Basically, in addition to the politics and cultural elements, most opposition can be explained with the market category concept. The Yilan International Children’s Folklore & Folkgame Festival itself, the county government and the local residents are the viewpoints that are interdependent with the market. On the one hand, this concept can be used to research the links with the Yilan International Children’s Folklore & Folkgame Festival that cannot be neglected, and on the other hand to explore the elements of the local qualities.