Governance in General
These days "Governance" is attracting a lot of discussion amongst project management academics and practitioners. So, just what is "governance" exactly? Well, it turns out that it depends on whom you talk to. In international affairs, for example, we often hear the term "Good Governance". According to Wikipedia:
Good Governance is an indeterminate term used in international development literature to describe how public institutions conduct public affairs and manage public resources in order to guarantee the realization of human rights. Governance describes "the process of decision-making and the process by which decisions are implemented (or not implemented)". The term governance can apply to corporate, international, national, local governance or to the interactions between other sectors of society.
In practice, "Good Governance" provides the basis for comparing the government operations of developing countries to those of the democratic countries of the west.
In business we see the term "Corporate Governance" that essentially refers to the "administrative activity" of the corporate organization. That is:
Corporate Governance is "the system by which companies are directed and controlled". It involves regulatory and market mechanisms, and the roles and relationships between a company's management, its board, its shareholders and other stakeholders, and the goals for which the corporation is governed., 
In practice it is the means for sorting out, or mitigating, the conflicts of interest amongst the shareholders and the stakeholders.
Then there is the fledgling "Project Governance". Here Wikipedia has an extensive and interesting description that boils down to:
The role of Project Governance is to provide a decision-making framework that is logical, robust and repeatable to govern an organization's capital investments. In this way, an organization will have a structured approach for conducting both its business-as-usual activities and its business change, or project, activities.
In practice, it is recognized that some form of "governance" is a critical element of any project, i.e. accountability and responsibility for the various contained activities. However, not all organizations have formal corporate policies covering project activities in the same detail as they have for covering their business-as-usual activities.
Now, new on the scene comes project portfolio management governance.
1. What is Good Governance, UNESCAP, 2009, retrieved July 10, 2009.
2. Wikipedia http://en.wikipedia.org/wiki/Good_governance#cite_note-UNESCAP-1
3. Proximity/Franklin U.S. English Thesaurus
4. European Corporate Governance Institute, Cadbury Committee, 1992
5. OECD Principles of Corporate Governance, 2004, retrieved 2011-07-20
6. Tricker, Adrian, Essentials for Board Directors: An A-Z Guide, Bloomberg Press, New York, 2009
7. http://en.wikipedia.org/wiki/Project_governance, retrieved December, 2012