Blayney Shire Council staff recommended approval for the development application on Monday night, but councillors opted to defer it pending a site inspection.

Converted from a three-bedroom house, the 38-place centre proposed for George Street would employ eight staff members a day, with four parking spaces on the street out the front.

But resident Ann Harrison said a further eight-space sealed parking area proposed on a grass verge opposite the centre did not meet the Australian standard and cars parked on the narrow street would not allow moving cars to pass each other.

“It's dangerous to everyone and the council is offering the verge, which is council-owned land, for the benefit of a single commercial individual,” she said.

Ms Harrison said she was concerned the development could set a precedent to gradually erode Millthorpe's village feel.

Fiona Ivancsik said the proposal failed council's own planning guidelines.

“In their own settlement strategy, they're concerned about having commercial development along Park, Pym and Victoria streets yet they want to allow this in a residential area,” she said.

The residents were grateful for the deferral.

“It's hard for councillors to understand what's going on with different submissions and the only way they can make a responsible decision is come to the site and look,” Ms Harrison said.

Mmayor Scott Ferguson said the commercial growth in Millthorpe and demand for a childcare centre were good problems to have.

“But with infrastructure like the little streets, we do struggle to sort all that out,” he said. “It's a bit of a juggle and councillors are concerned about getting the right decision for the community and for the residents.”

Cr Ferguson said verges could be legally used as parking and only disabled spaces needed to be off-street.

Applicant Joel Smith could not be reached for comment.