Although difficult to deal with, municipal records can be of great value to genealogists since they include essentially an annual head-of-household census, plus other records that often contain a great many names. This source is not well-known because:
(a) you must know the municipality your ancestor was in,
(b) you have to know where that municipality's records are now, and
(c) the records will almost certainly be completely un-indexed.
You need to know the name of the municipality at the time your ancestor was there and its status at that time. The status of townships is fairly consistent with the occasional one splitting, giving 'East' and 'West' or 'North' and 'South'. However urban municipalities are much more complex. There is a difference between searching the records of a city and the records of a town, so you need to know when the town became a city. There is a difference between searching the records of an incorporated village and the records of an entity called a village but in fact just a collection of houses (incorporated villages did not exist in Ontario before 1850).
The administrative municipalities in Ontario have changed enormously since the mid-1960's and in fact, through entities such as united townships, have been constantly changing throughout our history. Since it is the administration that creates the records and since a change in administrative structure can cause the record to be separated from the entity the record refers to, you need to know a lot of history to know where to find the records. Many townships have some of their records housed with the records of another township, perhaps in a different county. These records are “lost” in the sense that no one now remembers where they are.
The staff of a modern municipality are in the business of running a modern municipality and have little time for old records. As a result the old records are bundled into a basement room and forgotten. You may be the first person to look at them in fifty years. Do not expect them to be well sorted, never mind indexed. Do not be surprised if the staff have no idea what is in that basement room.
OGS is developing a project to identify the location of Ontario's municipal records. This will be a long-term project, requiring perhaps a decade to complete.