It depends on who you ask!  Advocates often rationalize such participation as an extension of democratic citizenship.  It the movement for such participation is really "grass-roots," it may indeed indicate authentic democratic empowerment.  BUT, critics often see "the provision of public participation" as just a ploy on the part of those in the "establishment" to get the appearance of participation without any major effects.  Participants may "recommend" a variety of proposals, but there is no guarantee and little likelihood that serious challenges to official positions will succeed.  So, participation looks good, but actually accomplishes little except making the participants "feel better," AND giving the impression that the establishment "really listens!"  To be truly effective, public participation in planning processes, would have to demonstrate a certain quality and quantity of policy impact, and against this standard the efforts of public participation could be assessed as either successes or failures, depending on whether or not the kind and level of impact specified had been achieved.

I would go more philosophically into this, as extracted both from my readings and the experience of Eastern European countries: in your question you advocate that those should be "incorporated into the planning and decision-making process". That is in my opinion indicative that public participation is still seen as an external input which we need to find specific mechanism for including into the planning system. But what if this participation would be organically included in the planning process, if it would be "apriori" considered a indispensable component of the system?  

Thank you Mihai Razvan Nita for your answer. Your answer corresponds with my research described in my book - My book is based on an empirical comparative examination of the effectiveness of various participatory processes to extract local knowledge and incorporate it into plans. One of the significant outcomes of that research was that bottom-up grassroots-collaborative participatory processes (in contrast to top-down processes controlled by jurisdictions) are capable of uncovering and extracting local knowledge and incorporating that knowledge into alternative plans. In that way grassroots participatory processes become an inherent part of the processes of planning knowledge generation and plans design, that eventually get the statutory affirmation. 

Fostering Better Communication and Participation in Projects, a short piece available at https://www.researchgate.net/publication/267236932_Fostering_Better_Communication_and_Participation_in_Projects, offers an interesting take on this from the perspective of "concerns" raised by civil society organizations.

Article Fostering Better Communication and Participation in Projects

While I agree with your premise that public participation is a way to bring "citizen knowledge" into project planning, I am more cynical. Often public participation is a means to coopt the public either into supporting (or appearing to support) the project, or to be able to assert later, e.g., during litigation, that they were included in project planning and thus shouldn't have standing in said litigation. Not that I'm opposed to public participation: it's the right thing to do for the right reasons. Unfortunately the right reasons aren't the only reasons.

To uncover the hidden realities under the concept of an " iceberg", that can be obtained through a productive process of participation.

Thank you Curtis Misltom for you response. In my book I prove that the best way to uncover hidden realities is via the anthropological research. 

Interesting question.  I suggest two generic answers.  First, taking participation as a means to  an end.  In this line, notwithstanding different types of participation ( e.g. manipulation), ideally,  the aim of public participation in planning process is to set collective goals. Second, taking participation as end by it self, the ultimate aim is to ensure democracy and human right in development process. 

Whilst i side with the thoughts above, involving local people in the planning process is a means to enhance legitimacy of the entire process which will make the outcome more enforceable as people see it as their own [high sense of ownership]. This notwithstanding, it depends on what form of participation one talks of; if it is illusory [coopting only elites or the leaders in society], then it will not yield significant results but if broad-based and largely broad-based, then it will yield more significant impact. For more of these; this paper could be very useful.

"Rising to the challenge: A framework for optimising value in collaborative natural resource governance"

Article Rising to the challenge: A framework for optimising value in...

In my view, public participation is one method to integrate the provider of local public goods (such as spatial planning) and property owners.  Of course, many other forms of integration exist, such as the election of local mayors by property owners. As many authors have shown, public participation is full of potential problems.  But, if it is correctly implemented, it should have positive effect on plan making and planning implementation.

Article Collective Goods and the Political Hold-Up Problem

Public participation , has its own intrinsic merit , in planning process and for a vibrant democracy. It has a value in engaging the actual stakeholders. But , it shouldn't be romanticized too much. While, the people at the grassroots should be consulted to get their inputs, their concerns and priorities, it should be actually factored in the planning and budgeting process.It shouldn't be mere tokenism. Or else, people will lose their faith in the planning process. I guess local self-governing units have important roles to play and there should be healthy dialogue between the votaries of bottom-up and top-down approaches.Ultimately, there should be continuous engagement in this dialogue so that the feedback loop remains open to correct the deviations and distortions.