Here are the top 10 developments in this case:
Delhi's anti-corruption bureau, which investigates complaints against officers, is under the centre's control, the Supreme Court ruled, in a huge setback to AAP, which had argued that an elected government should have the power to act against corrupt bureaucrats. The centre also has the power to appoint inquiry commissions.
Justices AK Sikri and Ashok Bhushan could not decide on who should have powers over officers in Delhi. Justice Sikri believed that the transfer of high-ranking officers of the level of Joint Secretary and above should be decided by the Lieutenant Governor.
Demarcating other conflict points, the court said the Delhi government can appoint directors in Discoms or power distribution companies, decide on the rate of agricultural land and appoint special public prosecutors. For any "serious" difference of opinion, the Lieutenant Governor and the Delhi government can go to the President.
Today's ruling leaves the important subject of the control of officers undecided in the four-year power tussle between the AAP government and the centre's ruling BJP. Arvind Kejriwal called the ruling "injustice to the people of Delhi". He said the chief minister of Delhi does not have power to appoint even a peon.
The tug-of-war over the anti-corruption bureau started after an officer appointed by AAP in 2015 reopened old cases and arrested several central government employees. The union home ministry then cited a 2014 rule that the bureau could arrest only Delhi government employees.
Delhi is not a full state, so the city government has limited powers. The centre has jurisdiction over land, law and order and police. In 2016, the Delhi High Court said as Delhi was a Union Territory, its powers were with the centre and not the city government. The AAP government challenged the order.
In July, a five-judge constitution bench ruled that Delhi cannot be accorded the status of a state, but the Lieutenant-Governor has no "independent decision-making power" and must act on the "aid and advice" of the elected government.
Lawyers representing the Delhi government had told the court that ambiguities remained in dealing with administrative matters of the national capital in spite of that judgment.
In the lead-up to the national election due by May, the Delhi government had hoped for a favourable ruling so it could implement promises such as doorstep delivery of services - one of the decisions blocked by Lieutenant Governor Anil Baijal.
In July 2018, Mr Kejriwal sat on a nine-day-long protest in front of Mr Baijal's office to push him into ending an alleged strike by bureaucrats.
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