This study provides a critical examination of water governance structures in Semnan Province, aiming to shed light on the current situation by analyzing institutional gaps, conflicts, and inconsistencies. Employing a mixed-methods approach, the research first applies thematic analysis to explore the perspectives of 28 key stakeholders—including farmers, officials, industrial actors, and civil society representatives—involved in local water resource management. The findings identify key governance gaps and propose context-specific and actionable strategies to enhance local water governance. In the quantitative phase, fuzzy DEMATEL and system dynamics modeling are used to analyze causal relationships and assess possible scenarios for improving water governance at the local level. The results reveal seven fundamental governance gaps: administrative, goal-setting, policy, financial, informational, accountability, and capacity-related. The proposed solutions are categorized into three strategic domains: strengthening multilevel water governance, fostering inclusive stakeholder engagement , and promoting participatory water resource management in Semnan. Fuzzy DEMATEL analysis indicates that capacity, accountability, and financial gaps act as root causes, while administrative, policy, informational, and goal-setting gaps are their outcomes. Among these, the capacity gap is identified as the most influential, while the goal-setting gap is the most affected. System dynamics modeling, conducted across three scenarios—optimistic (full implementation of all strategies), pessimistic (minimal implementation of feasible strategies), and moderate (partial implementation)—demonstrates that the proposed solutions effectively reduce governance gaps.