The historical development of local self-government in the Republic of Croatia is reflected through law reforms from 1992 and 2001, and adjustments to European standards after EU accession. Key legal regulations, such as the Constitution, the Law on Local Self-Government and the Law on Financing, ensure the autonomy of local communities. The organizational structure of cities, including the mayor and the City Council, enables efficient management, decision-making and the provision of various services. Cities actively manage public resources, providing key services such as education, health and utilities. They are financed by their own sources, common taxes and subsidies from the budget. The budget process includes planning, public hearings and budget adoption. Challenges include urbanisation, spatial planning and communal infrastructure. Trends in urban development tend towards smart cities and technological progress. Changes in local self-government are expected, including digitization, sustainability, infrastructure development, and support for education and culture to strengthen local identity, which are described in this paper.