In recent years, precision measurements across cosmic time have led to a 
widely accepted cosmological paradigm for galaxy assembly and evolution, 
the cold dark matter (LCDM) model. Within this theory, galaxies form 
"bottom-up," with low-mass objects ("halos") collapsing earlier and merging 
to form larger and larger systems over time. Ordinary matter follows the 
dynamics dictated by the dominant dark matter until radiative, hydrodynamic, 
and star-formation
processes take over. Although LCDM has had great success in explaining the 
observed large-scale distribution of mass in the universe, the nature of the 
dark matter particle is best tested on small scales, where its physical 
characteristics manifest themselves by modifying the structure of galaxy 
halos and their lumpiness. It is on these scale that detailed comparisons 
between observations and theory have revealed several discrepancies and 
challenged our understanding of the mapping between dark matter halos and 
their baryonic components. In this talk I will review the triumphs and 
tribulations of the theory. While the latter may indicate the need for more 
complex physics in the dark sector itself, emerging evidence suggests that 
a poor understanding of the baryonic processes involved in galaxy formation 
may be at the origin of these controversies.