This article examines the role of local festivals as a factor contributing to the territorial resilience of local communities in Bulgaria. Building upon the concepts of community resilience, territorial capital, social capital, and place-based development, the study explores how local festivals extend beyond their cultural and symbolic functions to become mechanisms for strengthening social cohesion, stimulating local economies, and enhancing the adaptive capacity of communities. The empirical analysis is based on data from a nationally representative sociological survey conducted in 2023 among 800 respondents living in settlements where local festivals are regularly organized. The analytical framework combines exploratory factor analysis, reliability analysis, one-way analysis of variance (ANOVA), and Games–Howell post hoc tests to identify the principal dimensions of the perceived impact of local festivals and to examine spatial differences across settlement types. Comparative analysis further reveals statistically significant spatial differences in public perceptions across settlement types, with the perceived contribution of local festivals to social cohesion, local development, and the adaptive capacity of communities increasing as settlement size decreases. These findings highlight the importance of the spatial context for interpreting the role of local festivals and provide empirical evidence supporting their integration into regional and local development policies. The findings demonstrate that local festivals generate multidimensional effects encompassing social cohesion, institutional cooperation, economic vitality, and community resilience. Factor analysis identifies several latent dimensions describing the contribution of festivals to local development, while comparative analysis reveals significant territorial differences. Residents of small towns and villages perceive local festivals as substantially more important for strengthening community solidarity, supporting local economic activities, preserving cultural identity, and addressing demographic challenges than residents of the capital city. These results suggest that the developmental functions of local festivals become increasingly significant as settlement size decreases. The study contributes to the growing literature on territorial resilience by proposing an empirical framework that conceptualizes local festivals as a form of territorial capital. It demonstrates that their developmental role is spatially differentiated and closely related to the socio-economic characteristics of local communities. The findings also provide evidence supporting the integration of local cultural initiatives into regional and local development policies aimed at strengthening the resilience and long-term sustainability of peripheral territories.