Mrs James was elected in May 1996 and served as a Labour councillor for the Cradley Heath and Old Hill ward for 12 years. She acted as mayoress to her late husband Brian James when he was mayor in 1998-99 and was deputy mayor herself in 2007-08.
Council bosses said Mrs James spent her time as a councillor mainly focusing on the wellbeing of older people and had a special interest in improving the lives of people with special educational needs.
She led various council committees including the disability advisory committee and the licensing committee.
Mrs James was a fourth generation member of the Salvation Army and has various other interests including being a member of the Townswomen’s Guild, the women’s section of Old Hill Cricket Club, a founder member of a choir Voices in Harmony which 25 years later is still raising money for local hospices, and a member of Cradley Heath Action Forum.
She was also a Sandwell magistrate until she retired at the age of 70.
Councillor Ann Shackleton, who served Ms James in the Cradley Heath and Old Hill ward, said: “Margaret will be remembered for her overall commitment and interest in matters relating to the area in which she had lived all her life such as for her involvement in the memorial to Mary Macarthur.
"She will also be remembered for ensuring that a favourable site for the new Salvation Army Citadel was secured when the former site came under a Compulsory Purchase Order.”
Council leader Rajbir Singh said: "My thoughts are with Honorary Alderman Margaret James’ family at this difficult time. She dedicated much of her life to improving our community in so many ways which is how she will be remembered.”
Mrs James is survived by her daughter Sharon, son Martin, two granddaughters and five great-grandsons.