Mr Cameron said big cities needed "big characters" to run them
The Conservatives say 12 of England's biggest cities outside London will get a vote on bringing in directly elected mayors if they win power.
Referendums would be held on a single day in cities including Birmingham, Bristol, Leeds, Manchester, Newcastle-upon-Tyne, Sheffield and Liverpool.
The party would also allow voters to veto big council tax rises, it said.
But Labour said cities could already choose to have elected mayors and there was "little new" in the plans.
Elected mayors were a key plank of Labour's plans to shake-up local democracy but take-up proved patchy.
'One to blame'
For a town or city to hold a referendum on having an elected mayor, it needs a petition signed by 5% of voters - and the majority of areas which held a vote rejected the idea.
Instead the Tory proposals would see a series of referendums held across 12 cities on a single day.
Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, Sheffield and Wakefield could get mayors with similar executive powers to London's Boris Johnson.
Conservative leader David Cameron said former deputy prime minister Michael Heseltine, who carried out a policy review on inner-city regeneration for the party, would help "define the powers of these city mayors".
He also said big cities needed "big characters" to run them, adding: "Over the last century, Britain has become one of the most centralised countries in the developed world.
"The central state, acting through its centralised government departments and agencies, doesn't have the imagination and flexibility to tailor its services to meet people's needs.
"If we had more local discretion, if we allowed more decisions to be made at the local level and more money to be spent at the local level, then we'd have better outcomes."
Under the Tory plans, caps on council tax rises would be scrapped. Instead, if increases broke a certain threshold, 5% of council tax payers could trigger a local referendum.
The Conservatives also propose making councils publish detailed information on expenditure, including senior staff's pay and perks and guidance to stop "rewards for failure" for sacked workers.
Regional Development Agencies would lose their planning and housing powers to councils and the party says it would scrap the controversial Infrastructure Planning Commission - set up by the government to take decisions on major projects like airports to streamline the planning process.
Mr Cameron said the changes could increase turnout at local elections.
But local government minister John Healey said: "Labour has devolved power to councils and the public, reversing the centralisation of the Thatcher years.
"The Tory proposals offer little new - our major cities can already choose to have a mayor.
"The Tories say they back councils but are set to cut cash for local authorities, meaning increases to council tax bills or cuts to local services, at a time when people need real help the most."
Between 1979 and 1994 - during the last Conservative government - it is estimated that 150 acts of Parliament were passed to transfer powers from local to central government.
But shadow local government secretary Caroline Spelman told the BBC: "Back in 1979 the whole landscape of local government was very different.
"You quite often hear commentators describe a problem of what they called 'loony Left' councils.
"That is not the situation we face today. The landscape has changed. Conservatives actually control three times as many councils as our opponents put together - and I think this is the time to actually trust in local democracy and return power to the local level."
Liberal Democrat local government spokeswoman Julia Goldsworthy said: "The Tories only talk about localism when it suits them, and when they do they think it makes sense to force elected mayors on cities hand picked from Westminster."
The National Housing Federation, which represents housing associations in England, said there were some innovative proposals but it would be a mistake to scrap all home-building targets.
An Ipsos/Mori poll suggests the Conservatives have opened up a 20-point lead over Labour.
The poll of 1,001 adults puts the Tories on 48%, Labour on 28% and the Lib Dems on 17%.
The poll, conducted over the weekend among those certain to vote, suggests the Tories' lead over Labour has extended by six points since the company last surveyed intentions in January.