This paper outlines PhD research associated with Leapfrog, a three-year funded AHRC project, which aims to analyse the impact of co-design practices in developing ‘engagement tools’ within community development. One challenge in co-design is identifying ways to understand holistically the context. Understanding individual and collective contextual factors simultaneously requires bridging the gap between theory and practice. Cultural-Historical Activity Theory (CHAT) interconnects all the components simultaneously illuminating a holistic approach for understanding such context. The paper focuses on the distribution of power in co-design aiming to illustrate how designers balance power and reflects on the experience of applying CHAT into practice, identifying informal learning as a key component. It elucidates how ethnographic methods can provide a deeper understanding about the context. About this, it can be concluded that a greater awareness of context, understood through the lenses of CHAT, helps designers to reveal the interconnection between individual and collective factors.