What is known as the rule stating that municipal governments can only have specific powers granted by the state?

Dillon's Rule is a legal doctrine that asserts municipal governments derive their authority from the state. Under this rule, local governments are considered to have only those powers specifically granted to them by the state constitution or state law. This means that if a power is not explicitly given to a municipality, it cannot assume or exercise that power independently. This doctrine is crucial for understanding the limits of local government authority as it establishes a clear framework in which local entities operate, heavily relying on state legislatures.

By contrast, other options like absolute immunity address legal protections for officials and entities under specific conditions, while Euclid's Rule relates more to zoning laws and not the broader concept of governmental authority. Legislative powers generally refer to the authority to enact laws and do not specifically address the relationship between state and municipal powers as Dillon's Rule does. Thus, the significance of Dillon's Rule lies in its clear articulation of the scope and limitations of municipal governance in relation to state authority.